Boca Raton, Fla. — Office Depot and OfficeMax shareholders approved the proposed merger of the retail chains during separate special stockholders’ meetings here this morning.
Under terms of the $1.2 billion stock-swap deal announced in February, OfficeMax stockholders will receive 2.69 Office Depot common shares for each share of OfficeMax common stock.
The CEOs of both chains will be considered along with external candidates in a search for a new chief executive, and both companies will have equal representation on the combined board in a so-called “merger of equals.”
Projected benefits will include upward of $600 million in annual cost savings by the third year of the merger, and increased scale, competitiveness and financial strength that will allow the combined $18 billion entity to better challenge No. 1 office-supply chain Staples and discount retailers like Walmart and Costco.
“We are very pleased with this endorsement of our proposed merger with Office Depot by our … stockholders,” said OfficeMax president/CEO Ravi Saligram. “This is an important and historic milestone in bringing our two great companies together.”
Office Depot chairman/CEO Neil Austrian said his shareholders “endorsed our collective efforts to create a combined company that will be a world-class provider of office products, services and solutions.”
The CEOs added that both companies are working with the Federal Trade Commission as it reviews the proposed merger and that integration planning is well underway. Pending regulatory approval, the chains still expect the deal to close by year’s end.
The combined company’s new name, brands and corporate headquarters are expected to be determined after a CEO is chosen.