The Australian Competition and Consumer Commission (ACCC) has flagged initial concerns over Platinum Equity’s proposed takeover of OfficeMax, following its recent acquisition of rival Staples.
The ACCC has outlined its preliminary view that combining Staples and OfficeMax may substantially lessen competition in the supply of traditional office products such as stationery, notebooks, and copy paper to large commercial and government customers in Australia.
ACCC Commissioner, Roger Featherston said the watchdog’s primary concern is that the loss of competition between Staples and OfficeMax could result in higher prices and lower levels of service.
“We are considering the extent to which other competitors will have the ability to compete with a combined Staples/OfficeMax for large customers after the acquisition,” Featherston said.
The ACCC is also considering a competing bid by Complete Office Supplies to acquire OfficeMax.
Staples and OfficeMax are the two leading suppliers to large commercial and government customers in Australia, with both offering a range of cleaning and janitorial supplies.
In 2015, the ACCC considered a global merger between Staples Inc. and Office Depot, ultimately deciding not to oppose the acquisition in Australia. That transaction was not completed following court action taken by the US Federal Trade Commission.
“The ACCC considers each merger review on its merits and the facts presented during the review,” Featherston said.
“In our 2015 review, very few concerns were expressed by market participants and the ACCC considered that Officeworks was likely to be a credible competitive threat in the future. The current ACCC review takes into account changes to the market and a higher level of concern from market participants. In addition, Officeworks does not appear to have expanded significantly into supplying large customers or to have any intention of doing so.”
The ACCC invites further submissions from interested parties in response to the Statement of Issues by 7 September 2017. The ACCC’s final decision is currently set to be announced on 16 November 2017.