The Australian Competition and Consumer Commission (ACCC) has given its tick of the approval of Staples’ proposed acquisition of Office Depot.
Staples and Office Depot supply office products globally. In Australia, Office Depot trades as OfficeMax.
Staples and OfficeMax are business to business suppliers that operate as ‘one-stop shops’ for corporate and government customers.
ACCC Commissioner, Dr Jill Walker, said the ACCC considered that the proposed acquisition was unlikely to substantially lessen competition in any office products market.
“The proposed acquisition will give Staples a much larger market share than its next closest competitors, which raised the potential for competition concerns. However, the ACCC found that Staples will continue to face strong competition. In particular, Lyreco and Complete Office Supplies have the capability to expand their supply of office products to large customers seeking to switch away from Staples,” Walker said.
The ACCC also believes that Officeworks, although a relatively small supplier to large corporate and government customers, has the potential to provide a further competitive threat to Staples for corporate and government contracts into the future, adding to the competition from Lyreco and Complete Office Supplies.
Officeworks is the largest supplier in the wider Australian office products industry. It already supplies medium-sized commercial customers and has been tendering to some large customers.
In determining approval for the proposed acquisition, the ACCC conducted market inquiries with a range of interested parties, including customers and suppliers of office products. The review focused on competition for supply of office products to large Australian corporate and government customers.
“Large corporate and government customers demand high-volume supply of a wide product range across multiple Australian locations. They typically run tender processes and are highly price sensitive,” Walker said.
The proposed acquisition is conditional on approval by competition authorities in the United States, Europe, and Canada, whose competition reviews are ongoing.
The ACCC liaised with the New Zealand Commerce Commission, United States’ Federal Trade Commission and with the European Commission to exchange information and views on the proposed acquisition.