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Staples to Acquire Office Depot in USD 6.3bn Deal.

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Vincent

MANews-(C)2009-2015

4 February 2015 - US-based office supplies retailers Staples, Inc. (NASDAQ: SPLS) and Office Depot, Inc. (NASDAQ: ODP) have entered into a definitive agreement under which Staples will acquire all of the outstanding shares of Office Depot, the companies said on Wednesday.

Under the terms of the agreement, Office Depot shareholders will receive, for each Office Depot share, USD 7.25 in cash and 0.2188 of a share in Staples stock at closing.

Based on Staples closing share price on February 2, 2015, the last trading day prior to initial media speculation around a possible transaction, the transaction values Office Depot at USD 11.00 per share.

This represents a premium of 44% over the closing price of Office Depot shares as of February 2, 2015, and a premium of 65% over the 90-day average closing price of Office Depot shares as of February 2, 2015. The transaction values Office Depot at an equity value of USD 6.3bn.

Staples began discussions to acquire Office Depot in September 2014.

The agreement has been unanimously approved by each company's board of directors. With the acquisition of Office Depot, Staples will have pro forma annual sales of approximately USD 39bn.

Staples expects to generate at least USD 1bn of annualized cost synergies by the third full fiscal year post-closing. The majority of these synergies would be realised through headcount and general and administrative expense reductions, efficiencies in purchasing, marketing, and supply chain, retail store network optimization, as well as sharing of best practices. Staples estimates one-time costs of approximately USD 1bn to achieve its synergy target.

Following the closing of the transaction, Staples' newly constituted board of directors will increase in size from 11 members to 13 members and include two Office Depot directors approved by Staples. Staples' corporate headquarters will remain in Framingham, Mass. and Sargent will continue to serve...

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