OFFICE SUPPLY FIRMS REQUEST MAY RULING.Byline: Bob Drummond and Greg Stohr Bloomberg News Staples Inc. and Office Depot Office Depot (NYSE: ODP) is one of the world's leading suppliers of office products and services. The Company's selection of brand name office supplies includes business machines, computers, computer software and office furniture, while its business services encompass copying, Inc. will hold off on their merger plans for now while a federal judge considers the Federal Trade Commission's request for a court order to block the proposed $4 billion acquisition. During a federal court hearing Friday, the companies asked U.S. District Judge Thomas Hogan Chief Judge Thomas F. Hogan was appointed to the United States District Court for the District of Columbia in August 1982 by Republican President Ronald Reagan and became Chief Judge on June 19, 2001. to decide on the court order by the end of May. The merger agreement between the companies expires May 31, after which either firm could back out. If the judge blocks the merger, permitting a full-scale antitrust trial, that would spell the end of the proposed combination of office-supply superstore chains, a company lawyer said. ``It will be the death knell death knell Noun something that heralds death or destruction Noun 1. death knell - an omen of death or destruction for this transaction,'' Office Depot lawyer Donald Kempf told Hogan. The FTC FTC See Federal Trade Commission (FTC). also released the legal brief it filed with the judge to support its request for a court order, although the document was censored cen·sor n. 1. A person authorized to examine books, films, or other material and to remove or suppress what is considered morally, politically, or otherwise objectionable. 2. to wipe out market share and other internal company information uncovered during the investigation. The brief says the government has internal company documents providing evidence that Staples considered the elimination of competition to be ``a primary motivation'' for the Office Depot acquisition, and demonstrating that the companies consider one another to provide ``unique competition.'' ``Indeed, investment analysts view the elimination of close competition between Staples and Office Depot as a `benefit' to this merger,'' the FTC brief said. ``Wall Street recognizes that, if this deal is approved, Staples will do what it has done consistently in the past - maximize prices wherever it faces reduced superstore competition.'' The government said its pricing studies show that other retail outlets that sell office supplies Office supplies is the generic term that refers to all supplies regularly used in offices by businesses and other organizations, from private citizens to governments, who works with the collection, refinement, and output of information (colloquially referred to as "paper work"). don't have an impact on the superstores' pricing. Still, the FTC said, even when the market is viewed broadly, to include other retailers who sell the same products, the merger would hurt competition to a degree that it would still be subject to a valid challenge under U.S. antitrust laws antitrust laws n. acts adopted by Congress to outlaw or restrict business practices considered to be monopolistic or which restrain interstate commerce. The Sherman Antitrust Act of 1890 declared illegal "every contract, combination.... . ``This acquisition is presumptively pre·sump·tive adj. 1. Providing a reasonable basis for belief or acceptance. 2. Founded on probability or presumption. pre·sump unlawful in either a superstore market or a market that includes those the defendants allege to be competitors,'' the FTC said. Staples and Office Depot have argued that the government has wrongly focused only on office-supply sales by superstore chains, ignoring the fact that discount stores, drug stores, supermarkets, and stationers also sell office supplies. |
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