Staples Inc. and Office Depot Inc. abandoned their merger after a federal judge sided with U.S. antitrust officials who challenged the combination of the two largest office suppliers, saying it would create an unrivaled giant.
U.S. District Judge Emmet Sullivan in Washington blocked the $6.3 billion deal late Tuesday, a victory for the Federal Trade Commission, which argued that uniting the national suppliers of pens and printer paper would harm buyers.
The FTC met its “burden of showing that there is a reasonable probability that the proposed merger will substantially impair competition in the sale and distribution of consumable office supplies to large business-to-business customers,” Sullivan wrote in a three-page order.
Staples fell as much as 16 percent to $8.69 in early trading in New York on Wednesday, while Office Depot tumbled as much as 38 percent to $3.75. Before the ruling, which the judge had said would come after the market closed, shares of the retailers rose in after-hours trading on an unverified Twitter message that the companies had prevailed.