Staples, Office Depot Up As FTC Hearing Continues

One of the most high-profile antitrust court battles in recent years involving a potential merger between Office Depot Inc ODP and Staples, Inc. SPLS could hinge on a judge’s opinion on the future of an unlikely third party: Amazon.com, Inc. AMZN.

The FTC case against Staples' $6.3 billion bid for Office Depot centers on the fact that the two companies currently account for 79 percent of the consumable office supplies sold to Fortune 100 companies.

In the trial that began this week, the FTC argues that Amazon is not a major player in the office supplies business, but lawyers for Staples say that it's only a matter of time.

Staples attorney Diane Sullivan argued that Staples and Office Depot are “like penguins on a melting iceberg” following Amazon's 2015 announcement that it plans to make a significant push into the office supply business in the future.

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Sullivan also referenced former retail leaders Circuit City, Borders and Radio Shack that have fallen by the wayside in the face of ecommerce competition from Amazon and others.

The hearing is expected to last for two weeks, but the market seems to like Sullivan’s arguments thus far. Shares of both Office Depot and Staples are up more than 7 percent in Tuesday’s session.

Disclosure: the author holds no position in the stocks mentioned.