Office Depot to buy smaller rival OfficeMax for $1.2 bn

Office Depot Inc, the second-largest US office supply retailer yesterday agreed to buy smaller rival OfficeMax Inc for $1.2 billion in an all-stock deal, in order to compete with industry leader Staples Inc.

In a rare blunder, Office Depot yesterday prematurely announced the deal on its website even as bankers and lawyers were putting final touches to the proposed acquisition.

For some reason, both companies were in a tearing hurry to make the announcement. When the final deal was announced two hours later, both companies had not decided the merged company's name, headquarters and who would run the company.

Office Depot is based in Florida, while OfficeMax has its headquarters in Illinois.

According to analysts, during talks, when a merger and price are agreed on, the first crucial items discussed are who would run the merged company and where it would be headquartered.

But the final press release did say that the newly constituted board will include equal representation from each side, and both companies will search for a new CEO. Office Depot's head Neil Austrian and his counterpart at OfficeMax, Ravi Saligram will be considered, along with external candidates.