Office Max, Office Depot Nearing Merger

Blue chip office supply chains OfficeMax Inc. and Office Depot Inc. are near a potential merger, according to sources. The deal is tentative, and could unravel pending negotiation points.

Rumors of a merger have been circulating for years. A recent report that Office Depot was selling its Mexican operations could be a snag for the deal, but the merger has many strategic benefits to both companies regardless.

Competition with industry giant Staples Inc., as well as the behemoth Amazon, have cut into sales and profits. By merging, Office Depot and Office Max would be able to cut down on redundant locations, up to 20 percent, while serving the same customer base. Cost savings are one of the prime benefits that would be realized in the short term.

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Boca Raton, Fla.-based Office Depot has 1,675 global stores with revenue of $11.5 billion and employs 39,000 people. Office Max is headquartered in Naperville, Ill., and earns $7 billion per year in its 900 stores with 29,000 employees.