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The New York Post reports that Staples may sell all of its 1,500 bricks-and-mortar locations to Office Depot - the same company that it wanted to acquire before federal regulators stepped in to prevent the deal on antitrust grounds.

The deal would come after Staples agreed to be acquired by private equity group Sycamore Partners for $6.9 billion.

Here's how the Post frames the story:

"Staples revealed in a public filing last week that on June 5, a bidder it called 'Party A' offered between $625 million and $700 million for Staples’ North American retail locations.

"'Party A' was Office Depot, which was angling to rebrand the Staples locations under its own name, according to a source close to the situation. Staples shunned the bid, agreeing instead on June 28 to go private under Sycamore in a buyout valued at 10 times the price of Office Depot’s retail deal. Indeed, Sycamore Partners paid a premium not for Staples’ stores, but rather to control the company’s lucrative business selling paper, pens and ink cartridges to mid-size and big corporate clients.

"As such, sources say Sycamore has signaled a willingness to offload the stores which, like much of the retail sector, are struggling as shoppers increasingly shift their buying to online rivals led by Amazon."
KC's View:
The irony of this potential deal is rich.

Staples and Office Depot argued they needed to merge in order to remain competitive. In blocking the merger, the feds essentially ignored the fact that there is so much competition from the likes of Amazon and Walmart, and argued that a deal would reduce competition in the corporate and government sectors.

Now, Staples has gone the private equity route, and the new ownership sees the bricks=and-mortar world as being so unfriendly that they want to get out of it completely. I suppose it is possible that the feds could block such a deal, but they'd have to do so with the knowledge that Amazon has publicly spoken about the fast growth of its B2B category and its ability to make inroads with corporate and government contracts.

What a crock.