The ACCC is raising concerns on the proposed acquisition of OfficeMax by US company Platinum Equity, which acquired rival Staples earlier in the year. Both outfits have retail printing activities in most stores.
The consumer watchdog is saying combining Staples and OfficeMax may substantially lessen competition in the supply of traditional office products such as stationery, notebooks, and copy paper to large commercial and government customers in Australia
Roger Featherstone, ACCC commissioner says, “The ACCC’s primary concern is that the loss of competition between Staples and OfficeMax could result in higher prices and lower levels of service. We are considering the extent to which other competitors will have the ability to compete with a combined Staples/OfficeMax for large customers after the acquisition.”
OfficeMax has 11 stores in Australia, offering print and print management in each location, as well as office supplies. Its print activities are wide ranging, ranging from business cards to direct mail, promotional items and outdoor media. Most print is outsourced to the trade.
Platinum Equity bought OfficeMax competitor Staples earlier this year for an undisclosed sum. Staples has 32 stores across Australia and New Zealand with a print department in each store. The new deal gives it ownership of two of the three big office supplies companies in Australia. Rival 160 store Officeworks – which has a print operation in most of its stores – is owned by Westfarmers.
[Related: Equity firm in talks to acquire OfficeMax]
The ACCC is also considering a competing bid by Complete Office Supplies to acquire OfficeMax.
In 2015, the ACCC considered a global merger between Staples Inc. and Office Depot, ultimately deciding not to oppose the acquisition in Australia. That transaction was not completed following court action taken by the US Federal Trade Commission.
Featherstone says, “The ACCC considers each merger review on its merits and the facts presented during the review. In our 2015 review, very few concerns were expressed by market participants and the ACCC considered that Officeworks was likely to be a credible competitive threat in the future. The current ACCC review takes into account changes to the market and a higher level of concern from market participants. In addition, Officeworks does not appear to have expanded significantly into supplying large customers or to have any intention of doing so.”
The ACCC is inviting further submissions from interested parties in response to the Statement of Issues by September 7. The ACCC’s final decision is currently set to be announced on November 16.
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