Boca Raton, Fla.-based Office Depot Inc. has reached a $1.2 billion deal to buy competitor OfficeMax Inc., based in Naperville, Ill., in an all-stock transaction, the companies said Wednesday.
The merger will create an $18 billion global office supply company. The marriage is aimed at making the new company more competitive with Staples, the nation's largest office supply company.
The headquarters location of the combined company — either Boca Raton or suburban Chicago — hangs on which CEO is chosen to lead the company, Office Depot's Neil Austrian or OfficeMax's Ravi Saligram, according to transaction details.
"In the past decade, with the growth of the Internet, our industry has changed dramatically. Combining our two companies will enhance our ability to serve customers around the world, offer new opportunities for our employees, make us a more attractive partner to our vendors, and increase stockholder value," Austrian said.
Office Depot will issue 2.69 new shares of common stock for each outstanding common share of OfficeMax.
That's worth about $13.50 a share, based on Tuesday's closing price — a premium of about 26 percent to Feb. 15, the last day before reports the companies were in talks to combine, according to Bloomberg.
The new company will have equal number of Office Depot and OfficeMax board members, according to the reports.