The Federal Trade Commission has challenged the Staples acquisition of Boca Raton-based Office Depot.
The proposed merger "would violate the antitrust laws by significantly reducing competition nationwide in the market for “consumable” office supplies sold to large business customers for their own use," according to the FTC.
“The Commission has reason to believe that the proposed merger between Staples and Office Depot is likely to eliminate beneficial competition that large companies rely on to reduce the costs of office supplies,” FTC Chairwoman Edith Ramirez said in a statement. “The FTC’s complaint alleges that Staples and Office Depot are often the top two bidders for large business customers.”
Roughly 2,000 people work at Office Depot in Boca Raton.
Last year, the city, county, and state pledged a combined $5 million to Office Depot (on top of $6 million pledged by the county in 2009) if it meets certain requirements on bringing and keeping jobs in the area.
If the company leaves, it has to pay back that money.
Staples, based in Framingham, Massachusetts, proposed to buy rival Office Depot for $6.3 billion.
Staples Inc. and Office Depot Inc. said Monday that they will show that the FTC's decision is based on "a flawed analysis and misunderstanding" of the competitive landscape the companies deal with.
The pair argue that competition has become even tougher since Office Depot and OfficeMax merged in 2013 and that the FTC is contradicting itself because it said that the office supply market was highly competitive two years ago.
Office Depot Chairman and CEO Roland Smith says Staples and Office Depot plan to pursue legal options in order to complete the deal.
The Associated Press and WPTV's Charlie Keegan contributed to this report.