Last December, the Federal Trade Commission (FTC) filed suit to prevent the proposed merger between office supplies companies Staples Inc. (NASDAQ: SPLS) and Office Depot Inc. (NASDAQ: ODP). The two companies issued a letter to customers Monday morning challenging the reasoning behind the FTC lawsuit.
The companies’ timing of the letter coincides with the beginning of the hearing in federal court on Monday. In the letter, Staples and Office Depot go on the attack:
The FTC’s actions to stop this transaction are based on a flawed analysis of the marketplace and a deep misunderstanding of the competitive landscape. The FTC has cherry picked a few facts to fit its narrative and support its case. In making its case, the FTC refuses to even acknowledge the rise of new competitors, such as Amazon, and the disruptive effects of the digital economy.
In brief filed on February 19, the FTC focused on the two companies as providers of goods to at least 79% of the market for business-to-business customers in the United States, including 94 of the firms listed on the Fortune 100. As it stands now, the two firms compete against one another for business, and the FTC says in its brief, “Bid data show that Staples and Office Depot most often win from, and lose to, each other.”
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