Office Depot and OfficeMax have finalized their merger, an all-stock deal that would create a company with combined 2012 revenue of $18 billion.
Earlier there was some doubt. As The New York Times DealBook said: "A press release announcing the merger of the two office supply retailers briefly surfaced on Wednesday, though it then disappeared from the Office Depot Web site. But negotiations haven't concluded, people briefed on the matter told DealBook."
Office Depot (ODP), based in Boca Raton, Fla., and OfficeMax (OMX), based in Naperville, Ill., did not respond to requests for an explanation, but shortly after 9:30 a.m. ET, a press release announcing the "merger of equals" appeared on the OfficeMax website, and shortly thereafter on the Office Depot website.
It says, "The combined company's name, marketing brands and corporate headquarters location are expected to be determined following the appointment of the CEO for the combined company."
And that process could take some time. As the press release says, "The parties have also agreed to form a selection committee made up of an equal number of independent Board members from each company that will oversee the search process for naming the CEO for the combined company. Both incumbent CEOs, as well as external candidates, will be considered...."
According to the press release, holders of OfficeMax shares will receive 2.69 shares of Office Depot for every OfficeMax share they own.
That's equal to about $13.50 per share, giving the deal a total value of about $1.2 billion.
Both companies' shares were higher Tuesday on reports of the deal. OfficeMax stock rose $2.25 or 21% to $13.00; Office Depot stock was up 43 cents or 9.37% to $5.02.
Analyst say if the deal closes it would likely benefit the largest office supply player, Staples (SPLS), because the combined entity will likely close some stores. Staples stock was up $1.70 Tuesday or 13.13% to $14.65 a share.
Office Depot has 1,675 stores worldwide, mostly in the U.S. and Canada. OfficeMax has about 900 stores in the U.S. and Mexico.