Yesterday, the Commissioner of Competition (the
"Commissioner") filed an application to the Competition
Tribunal challenging Staples, Inc.'s ("Staples")
proposed acquisition of Office Depot Inc. ("Office
Depot"). The Commissioner's announcement coincided with
the US Federal Trade Commission's (the "FTC")
parallel challenge south of the border.
On February 4, 2015, Staples announced that it would acquire
Office Depot in a transaction valued at $6.3 billion. At the time,
Staples claimed that the transaction would result in "at least
$1 billion of synergies" and that these saving would
"dramatically accelerate strategic reinvention which is
focused on driving growth in the delivery businesses [...]."
See press release here.
Staples is a major US based supplier of office products, such as
stationary, computers and accessories, office furniture, janitorial
products, etc. In Canada, Staples operates through four
subsidiaries, including Corporate Express Canada Inc. (also known
as "Staples Advantage") which focuses on the delivery of
office products to business customers. Office Depot, also a US
based supplier of office products (including providing business
delivery services) and operates in Canada under the Grand & Toy
According to the Bureau's press release, it believes that
the merged entity would account for over 80% of sales of various
office products and that the proposed acquisition would likely
substantially lessen competition in the office products delivery
business segment in Canada. The Bureau indicated that affected
customers include for profit, and not-for profit businesses,
governments, health care organizations and educational
institutions, which collectively purchase more than $500 million in
office products in Canada annually.
The Bureau is seeking either a complete partial blocking of the
The focus on the B2B aspect of the parties' businesses
suggests that the Bureau does not believe that smaller office
supply businesses or online vendors are effective substitutes for
business customers seeking delivery and related services.
The focus of how the proposed merger may impact a particular set
of customers is a good reminder for companies seeking to merge with
competitors to ensure that they consider the potential impact of
their deal on the various types of customers they service to
proactively identify possible concerns. The other interesting
takeaway is that, even in retail mergers, the presence of online
vendors may not be sufficient to address the Bureau's
Finally, this case serves as a useful reminder that the Bureau
works closely with competition agencies in other jurisdictions,
including with respect to bringing parallel enforcement action
where it believes it is appropriate to do so.
We will continue to monitor developments related to this
The Commissioner of Competition addressed innovation, enforcement and policy initiatives at the Competition Bureau in his keynote speech, "Strengthening Competition: Innovation, Collaboration and Transparency."
Used car listing website operator CarGurus Inc.'s attempt to force rival Trader Corporation to supply it with vehicle listing data has encountered a dead end as the Competition Tribunal denied it leave to commence a private application under several provisions of the Competition Act.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).