Office Depot and OfficeMax are merging in a $1.2 billion all-stock deal the companies confirmed today. The deal somehow leaked to Office Depot’s website earlier this week. The combined entity name, headquarters location, and CEO are still undetermined. This suggests that the deal was rushed after a draft accidentally went on Office Depot’s website. Office Depot CEO Neil Austrian and OfficeMax CEO Ravi Saligram are candidates for the job.
The deal involves the exchange of 2.69 Office Depot common shares for each OfficeMax share. The transaction is valued at $13.50 per share ($1.17 billion) based on 86.7 million shares outstanding as of October 26th.
Office Depot and OfficeMax compete heavily against retailers like Staples, Wal-Mart, Target, and Amazon.com. The deal is expected to yield an annual cost savings of $400 million to $600 million within 3 years after the deal closes by the end of the year.