ACCC Worried By Staples/OfficeMax Merger: Low Competition, High Prices?
Announced today, the ACCC has flagged its initial concerns that combining Staples and OfficeMax – through acquisition by Platinum Equity – will significantly lessen competition within the office supply market, especially considering the effect on large customers as government departments and corporations.
The ACCC’s “primary concern” is whether reduced competition will result in higher prices and lower service levels.
ACCC Commissioner Roger Featherston states, “We are considering the extent to which other competitors will have the ability to compete with a combined Staples/OfficeMax for large customers after the acquisition”.
A competing bid by Complete Office Supplies for the acquisition of Office Max is also being considered by the ACCC.
Interestingly, in a 2015 review, the ACCC did not oppose the global merger between Staples Inc. and Office Depot. (The transaction was not completed after court intervention from the US Federal Trade Commission).
Speaking of the 2015 review, the ACC states “very few concerns were expressed by market participants and the ACCC considered that Officeworks was likely to be a credible competitive threat in the future”.
The ACCC notes the current changes in the marketplace surrounding the proposed merger of today, saying “Officeworks does not appear to have expanded significantly into supplying large customers or to have any intention of doing so”.
“The current ACCC review takes into account changes to the market and a higher level of concern from market participants”.
The ACCC’s final decision is scheduled to be announced on November 16th.
Interested parties are invited to offer submissions to the ACCC’s Statement of Issues by September 7th.