New York -- Office Depot and OfficeMax are in talks to merge, according to reports by the Wall Street Journal and Bloomberg.
The retailers are discussing as potential stock swap that would result in a single company with nearly $18 billion in revenue, reports said. The combined company would be better positioned to take on Staples, Walmart and other competitors.
"The merger makes sense with both companies suffering from falling revenue since the 2008 recession and struggling to generate a profit margin of 3.0% (while Staples generates a margin greater than 8.0 percent)," explained IBISWorld office supply industry analyst, Dale Schmidt. "The hope is that the resultant company could cut redundant costs, raising its profit margin, while retaining a market share that will compete with Staples. However, with the ever-increasing popularity o