Office Depot, Inc is in merger talks with OfficeMax said people who are close to the situation. The two paper, pen and other office accessories retailers are trying to find a way to fend off the tough competition that rivals such as Staples and Amazon.com have produced over recent years.
The deal being negotiated is said to be just a straight stock for stock merger, but the terms are unknown as to what percentage of the new group will be held by Office Depot and OfficeMax.
Those who are aware of the deal said it was not completed and there always was the possibility it would not go through however, they also said that an announcement of a deal could be released sometime during the week.
Both chains have a large retail presence. Boca Raton, Florida based Office Depot currently has over 1,675 stores across the globe, with 39,000 employees and annual sales of more than $11.5 billion. Naperville, Illinois based OfficeMax is a bit smaller with only 900 stores, $7 billion in annual sales and approximately 29,000 employees.
A deal would be beneficial to both of the companies as each has been hit hard from weak economies, sales dropping and competition rising. Office Depot has been valued at $1.3 billion and OfficeMax at $900 million by industry experts.
OfficeMax is due to release its latest quarterly and its annual earnings report this Thursday.