Updated from Dec. 24 to include new court filing from Staples.
The government continues to show it's not keen on having one dominant office supplies company in America.
But Staples (SPLS) is apparently not going to go away quietly in its bid to merge with smaller rival Office Depot (ODP) . In new court papers filed in Washington federal court by Staples on Dec. 23, the retailer said the Federal Trade Commission's claims that a merger would harm competition are "fundamentally flawed." Staples asserted that the FTC's complaint is a "misguided application of the antitrust laws," adding that the businesses face "fierce competition today and in the future from a strong and expanding set of competitors."
Staples' opening shot against the FTC comes a few days after the agency dealt it another serious setback. In a statement on Dec. 21, Staples said the FTC rejected its proposal to divest up to $1.25 billion of commercial contracts in an effort to gain approval by regulators to acquire Office Depot. According to Staples, the FTC did not issue a counter proposal. The company said it's still willing to continue negotiations with the FTC to reach a settlement that addresses antitrust concerns, while also noting that it's pursuing the transaction through litigation.
"Staples and Office Depot have not shown the FTC that by divesting commercial contracts, it would create a meaningful competitor to their combined company," said Andrea Murino, co-chair of law firm Goodwin Procter's antitrust practice. "The FTC doesn't do its assessments in a vacuum -- it talks to customers, competitors and in this case, they have decided the market is not as diverse as Staples and Office Depot suggest."