OfficeMax and Office Depot today announced they had finalized recent merger discussions, as both boards of directors unanimously agreed to a "merger of equals."
The agreement is an all-stock transaction, in which the outstanding shares of OfficeMax and Office Depot will be combined. As such, the deal is expected to qualify as a tax-free, reorganization.
OfficeMax stockholders will receive 2.69 shares of Office Depot for each share of OfficeMax stock they own. The combined management team of OfficeMax and Office Depot is expected to draw on leaders in both companies and the boards of directors of each will have equal representation post-merger.
According to Office Depot CEO Neil Austrian, "Office Depot and OfficeMax share a similar vision and culture, and will greatly benefit from drawing on the industry's most talented people, combining our best practices and realizing significant savings."
Combined total revenues for OfficeMax and Office Depot were $18 billion in 2012. The merger is expected to deliver $400 million to $600 million in annual cost synergies by the third year following the transaction's close.
Together, the two companies have more than 2,500 retail stores worldwide, with a total work force of approximately 67,000 employees. OfficeMax CEO Ravi Saligram said, "We are confident that there will be exciting new opportunities for employees as part of a truly global business."
The combined company's name, marketing brand, and corporate headquarters location will be determined after a CEO is named. Austrian and Saligram will remain in their current positions through the completion of the search process that will consider both of them as well as external candidates for the new CEO job.
The agreement is subject to customary closing conditions, as well as gaining regulatory and shareholder approvals. The deal is expected to close by the end of 2013.
The article OfficeMax and Office Depot Finalize Merger Deal originally appeared on Fool.com.Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.