Updated share prices have been added to this story.
Shares of Office Depot surged 28.32% to $5.89 before market open, while OfficeMax climbed 20% to $12.90.
Citing people familiar with the matter, The Wall Street Journal reported that the deal is expected to be stock-for-stock, and said that although talks could still fall apart an announcement could come as early as this week.Bloomberg also reported that a deal is possible this week, citing a person familiar with the matter. Shares of Office Depot, which has been struggling to compete with larger rival Staples (SPLS - Get Report) , have plunged more than 67% over the last five years. Both Office Depot and OfficeMax declined to comment on this story when contacted by TheStreet. "As a matter of company policy, we don't comment on rumors or speculation," wrote an Office Depot spokesman, in an email. "It is our long-standing policy that we do not comment on market rumors or speculation," added a spokeswoman for OfficeMax in an email to TheStreet. Staples shares rose 13.44% to $14.69 in premarket trading. --Written by James Rogers in New York. Follow @jamesjrogers >To submit a news tip, send an email to: email@example.com.