NEW YORK (TheStreet) -- Office Depot (ODP) and OfficeMax (OMX) and have completed their long-awaited merger, finalizing plans set in motion when the companies announced their intentions in February. Going forward, the combined company will trade under the Office Depot brand and use Office Depot's New York Stock Exchange-listed ticker.
Before inking the deal, both company reported quarterly earnings which failed to impress Wall Street. Office Depot reported earnings of 2 cents a share on revenue of $2.62 billion. Earnings fell short by 4 cents a share, though revenue was as analysts surveyed by Thomson Reuters had expected. OfficeMax reported earnings of 15 cents a share, 7 cents short of expectations, on $1.66 billion in revenue.
Both office supply stores were victim to sluggish sales as online giants, namely Amazon (AMZN), priced them out of the market. Office Depot reported total sales down 3% compared to a year earlier, while OfficeMax saw a 4.6% decline.
The merger is expected to create an office supplies powerhouse with combined annual sales of around $17 billion. The combined company said it will incur numerous one-time charges as it completes the merger process. Costs include $200 million in operating costs, $400 million in integration costs and at least $200 million in capital spending through to the end of 2016.
On the newly formed company's third-year anniversary, management expects to have realized between $400 million and $600 million in operational synergies. Combined, the office suppliers will also benefit from a more robust liquidity position. Based on 2012 financials, the companies expect to have access to more than $1 billion in cash and an additional $1 billion in credit facilities.