Feb. 20, 2013 at 8:45 AM ET
Is there a deal or isn't there? Apparently there is.
The boards of Office Depot and Office Max confirmed Wednesday that they agreed to combine the two companies in a $1.2 billion, all-stock deal that could alter the balance of power in the office supply retail market.
The boards of both companies approved the deal after a confusing morning in which the deal was announced prematurely.
The deal, one of several large-scale acquisitions announced within the last week, had been buried within Office Depot's fourth quarter earnings release, which is not a typical way that companies trumpet a deal of this size. A source told Reuters that the statement had been a draft and that, at the time, the deal was not yet completed.
Under the terms of the deal, OfficeMax stockholders will receive 2.69 Office Depot common shares for each share of OfficeMax common stock. In a joint statement, the office suppliers said the new company would be valued at $18 billion. The new company would have an equal number of Office Depot and Office Max directors on its board.
The two companies are competitors to Staples, the world's largest supplier of office goods. The deal may be an attempt by both OfficeMax and Office Depot to become more competitive with Staples, even as they confront declining market share and consumers that move to buy online.