U.S. markets closed

Staples says U.S. regulators' complaint against merger is 'misguided'

A shopping cart is seen outside a Staples office supplies store in the Chicago suburb of Glenview, Illinois, February 4, 2015. REUTERS/Jim Young

By Diane Bartz

WASHINGTON (Reuters) - Staples Inc (SPLS.O) accused federal regulators of applying antitrust laws in a "misguided" way to try to block its $6.3 billion merger with smaller office supply retailer Office Depot Inc (ODP.O).

The Federal Trade Commission used "selective documentation" to show that the merger partners were the only companies competing for large, national customers, Staples said in a court filing late Tuesday.

The FTC argued in a Dec. 7 lawsuit that Staples, if it bought Office Depot, would have 70 percent of the market for office supplies purchased by large national customers. The companies were much larger than No. 3 W.B. Mason, which is in 13 states, it added.

The trial is set for March. 21.

Staples said the FTC's complaint is a "fundamentally flawed and misguided application of the antitrust laws," and cited "fierce competition" from companies such as Amazon and Amazon Business, as well as W.B. Mason. It denied that Office Depot was its closest competitor.

Staples also cited a 2013 FTC document in which the agency approved Office Depot's purchase of OfficeMax while pointing to "a host" of "strong competitors" for multi-regional and national customers."

Staples had initially offered to divest more than $500 million in commercial contracts in the deal announced in February. It raised the total to as much as $1.25 billion to win antitrust approval, but said the FTC rejected that as inadequate.

The FTC stopped Staples' attempt in 1997 to merge with Office Depot, arguing that the deal would lead to higher prices for customers.

Canada's Competition Bureau has also said it would challenge the proposed merger.

The case at the U.S. District Court for the District of Columbia is Federal Trade Commission v Staples, Inc. It is No. 15-2115.