BOCA RATON, FL, NAPERVILLE, IL - Office furniture and accessory giants Office Depot Inc. and OfficeMax Inc. have moved one step closer to a merger following approval by stockholders.
News of the approval by Office Depot (NYSE: ODP) and OfficeMax (NYSE: OMX) shareholders was announced July 10. As part of the agreement, Office Depot common stock shares will be issued to OfficeMax stockholders. The agreement is scheduled to close by the end of the year, subject to regulatory approval.
"We are very pleased with this endorsement of our proposed merger with Office Depot by our OfficeMax stockholders," Ravi Saligram, president and CEO of OfficeMax, said in a statement. "With integration planning now well underway, we believe more than ever that the combined company will create a stronger, more innovative and efficient global provider better able to compete in today's rapidly changing office solutions industry, creating long-term value and opportunity for our customers, our stockholders and our employees."
"Our Office Depot shareholders today endorsed our collective efforts to create a combined company that will be a world-class provider of office products, services and solutions, with significantly improved financial strength and the ability to deliver better long-term operating performance," Office Depot Chairman and CEO Neil Austrian said in a statement.
The proposed merger between Office Depot and OfficeMax was first announced in February. The combined company would have had pro forma combined annual revenue for 2012 of approximately $18 billion.
OfficeMax has approximately 29,000 employees and 900 retail stores in the United States and Mexico. The company posted sales of $6.92 billion for fiscal year 2012.
Office Depot has annual sales of approximately $10.7 billion. It has 1,628 worldwide retail stores, employs about 38,000 associates and serves customers in 60 countries around the world.
In related news, Office Depot on July 9 announced it had closed the sale of its 50 percent stake in Latin American Joint Venture Office Depot de Mexico S.A. de C.V. to Grupo Gigante, S.A.B. de C.V. (GIGANTE.MX) for the Mexican Peso amount of 8,777.36 million in cash. Grupo Gigante now has 100 percent ownership of Office Depot de Mexico.
“We are pleased to finalize this sale and thank Grupo Gigante for their partnership,” Mike Newman, executive vice president and CFO for Office Depot said in a statement. “The approximately $550 million in net after-tax proceeds from the sale will significantly enhance our liquidity position now and as we enter into the proposed merger with OfficeMax.”
A portion of the proceeds are expected to be used to redeem 50 percent of the Office Depot's convertible preferred shares held by BC Partners Inc.
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