The European Commission has approved the acquisition of office supplies distributor Office Depot by Staples, subject to conditions.
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Following an in-depth review, the Commission has approved under the EU Merger Regulation the acquisition of office supplies distributor Office Depot by Staples, subject to the divestment of Office Depot's contract distribution business in Europe and entire business in Sweden.
Commissioner Margrethe Vestager, in charge of competition policy, said: "The substantial remedies package offered will ensure that effective competition is maintained, in particular on the EU's international office supplies market.
"This will allow European companies to continue to benefit from the Single Market by procuring their office supplies internationally and to reduce costs."
The investigation showed that only Staples, Office Depot and Lyreco are capable of entering into international supply contracts for large business customers in Europe, since they are present in several countries and can fulfil international orders.
Customers do not consider switching to several national contracts as a sufficiently attractive alternative because of the lower prices achieved under international contracts and the savings in administrative costs.
Moreover, the competition from specialist suppliers, such as companies supplying only printer cartridges, is limited as they offer a smaller product range and typically cannot provide the same services as those offered by contract stationers.
The Commission also found that barriers to enter the contract market are high due to the specific requirements of large contract customers who purchase under tenders.
In particular, suppliers must be able to offer a large range of office products at competitive prices in a number of countries. Therefore, new competitors in this market would need to set up operations in many countries or enter into an international alliance with companies active in other countries.
The investigation also showed that online commerce companies, such as Amazon, cannot currently be considered as competitors in the contract business market in Europe since they only sell office products through the online sales channel.
The merger, as notified, would therefore have critically reduced competition in the already concentrated market for international contracts for office supplies.
The Commission came to the same conclusions whether assessing the distribution of traditional office supplies as a whole or the distribution of stationery only. ■