NAPERVILLE, Ill. and BOCA RATON, Fla. - OfficeMax Incorporated (NYSE: OMX) and Office Depot, Inc. (NYSE: ODP) today provided an update on the integration planning process and expected annual cost-saving synergies related to the companies' proposed merger.

Office Depot and OfficeMax continue to partner closely with The Boston Consulting Group (BCG), a global management consulting firm that was retained in May to provide integration support. BCG has helped global and multinational clients integrate hundreds of mergers and acquisitions in the last five years.

The integration planning process has made significant progress since being launched in May:

•An Integration Management Office (IMO) has been established to guide day-to-day integration design and planning, ensure interdependencies and risks are identified, and make certain that mitigation plans are developed. The IMO has created an overall integration methodology and schedule, with clear governance guidelines.

•Twelve integration planning teams, co-led by senior leaders of both companies, have been formed with the goal of ensuring business continuity, customer and talent retention and synergy attainment. These teams have completed team charters, identified Day One priorities and action plans, and developed detailed workplans for their functional areas. These teams are in the process of identifying the critical initiatives to execute after closing in order to deliver the expected synergies and begin integrating the companies; identifying best practices within the respective companies; and designing an operating model and organizational structure for the combined company.

•Five integration platform teams have been established and are executing detailed workplans to support the IMO and integration planning teams with project management, synergy development, communications, change management and talent management.

•This collective integration team, comprised of more than 150 seasoned leaders from both companies and with the support of a dedicated BCG team, has extensive industry and functional expertise, broad experience in the design and development of efficiency capture programs, and integration planning expertise for mergers of varying scale.

Based on their integration planning work to date, the companies reaffirmed confidence in their ability to realize $400-$600 million of total annual cost synergies by the end of the third year following the close of the merger, with synergies categorized as follows:

•Purchasing Efficiencies: An estimated total of $130-$200 million in synergies are expected to come from purchasing efficiencies related to the combined cost of goods sold, including vendor optimization and SKU harmonization.

•Supply Chain: Approximately $70-$100 million in estimated synergies are expected to result from combining the North American supply chains. The companies believe that supply chain network optimization, along with transportation and delivery efficiencies, will generate these significant savings.

•Advertising and Marketing: The companies estimate savings in the range of $70-$100 million from advertising and marketing efficiencies. A substantial amount of these savings are expected to result from reducing duplicative efforts in weekly inserts, media and catalogs.

•Selling, General and Administrative: An estimated $130-$200 million in savings is expected to result from sales and support function efficiencies and standardization of processes.

The companies believe approximately one third of the $400-$600 million range of synergies are achievable in the first year following the close of the merger. The companies also reiterated their expectation to incur approximately $350-450 million in one-time costs, including transaction expenses, and approximately $200 million in capital investment to achieve the cost synergies.

With the recently announced departure of Bruce Besanko, Executive Vice President, Chief Financial Officer and Chief Administrative Officer of OfficeMax, co-leadership of the integration planning process will transition fully to Steve Parsons, Executive Vice President and Chief Human Resources Officer of OfficeMax. A member of the executive-level Integration Steering Committee, Mr. Parsons has a strong experience base in integration planning for mergers of varying complexity and scale, up to and including multi-billion-dollar transactions, prior to joining OfficeMax. Mr. Parsons will partner with Mike Newman, Executive Vice President and Chief Financial Officer of Office Depot, who continues in his co-leadership role.

"We recognize that the synergy benefits are an important part of the shareholder value that is being created from this merger and I'm very pleased with the tangible momentum of the integration planning process so far," said Neil Austrian, Chairman and CEO of Office Depot. "The talent and dedication of the teams working on the integration give us confidence that the combined company will deliver on our promise to build a stronger, more efficient competitor positioned to meet the growing challenges of a rapidly changing industry. We remain optimistic that the merger will close by the end of the 2013 calendar year, and we continue to work cooperatively with the FTC as it conducts its review of the proposed combination."

"We are extremely pleased with the progress we are making in our integration planning, which will ensure a smooth transition for all of our stakeholders and allow us to begin capturing identified cost synergies starting on Day One," said Ravi Saligram, President and CEO of OfficeMax. "True to the spirit of our merger of equals structure, objective decisions aimed at identifying the best systems and processes for the combined company are being made at an appropriate pace. I have been particularly impressed with the expertise and collaboration demonstrated by integration team members of both companies, and my confidence level in attainment of our synergies is even higher now."

Transaction Details

On February 20, 2013, OfficeMax and Office Depot announced their entry into an agreement to combine their companies in a merger of equals. On July 10, 2013, stockholders of both companies approved the merger. The transaction is expected to close by the end of calendar year 2013, subject to regulatory approvals and the satisfaction of other customary closing conditions.

As announced on June 11, 2013, the companies selected Korn/Ferry International to assist the CEO Selection Committee, which is co-chaired by OfficeMax Board Member Jim Marino, former President and CEO of Alberto Culver Company and Office Depot Board Member Nigel Travis, Chairman and CEO of Dunkin' Brands, Inc. in its comprehensive search. The committee is actively engaged in evaluating a slate of candidates, including incumbent CEOs Ravi Saligram of OfficeMax and Neil Austrian of Office Depot. The goal remains to identify a proven leader with the strategic insight, operational discipline and inspirational leadership required to transform the business and deliver the synergies that come from combining the companies. Both incumbent CEOs will remain in their current positions through the search process, which is anticipated to be completed at or prior to the close of the transaction.

About OfficeMax

OfficeMax Incorporated (NYSE: OMX) is a leading provider of products, solutions and services for the workplace, whether for business or at home. The OfficeMax mission is simple: We provide workplace innovation that enables our customers to work better. The company provides office supplies and paper, print and document services, technology products and solutions, and furniture to businesses and consumers. OfficeMax consumers and business customers are served by approximately 29,000 associates through OfficeMax.com, OfficeMaxWorkplace.com, and Reliable.com; more than 900 stores in the U.S. and Mexico, and direct sales and catalogs. OfficeMax has been named one of the 2013 World's Most Ethical Companies, and is the only company in the office supply industry to receive Ethics Inside® Certification by the Ethisphere Institute. To find the nearest OfficeMax, call 1-877-OFFICEMAX. For more information, visit www.officemax.com.

About Office Depot

Office Depot provides office supplies and services through 1,628 worldwide retail stores, a field sales force, top-rated catalogs and global e-commerce operations. Office Depot has annual sales of approximately $10.7 billion, employs about 38,000 associates and serves customers in 60 countries around the world.

Office Depot's common stock is listed on the New York Stock Exchange under the symbol ODP. Additional press information can be found at: http://news.officedepot.com.

All trademarks, service marks and trade names of Office Depot, Inc. and OfficeMax Incorporated used herein are trademarks or registered trademarks of Office Depot, Inc. and OfficeMax Incorporated, respectively. Any other product or company names mentioned herein are the trademarks of their respective owners.

Source: OfficeMax Incorporated