A federal judge in Washington stopped a proposed merger between Staples and Office Depot, agreeing with Obama administration officials who argued it would have violated antitrust law.
US District Judge Emmet Sullivan ruled Tuesday that the $6.3 billion deal would have illegally quashed competition in the market for office supplies.
The two companies said they would not appeal the decision and are jettisoning plans to merge.
The Federal Trade Commission, which late last year sued to stop the deal, hailed Sullivan’s decision.
“Today’s court ruling is great news for business customers in the office supply market,” said FTC Bureau of Competition Director Debbie Feinstein. “This deal would eliminate head-to-head competition between Staples and Office Depot and likely lead to higher prices and lower quality service for large businesses that buy office supplies.”
The Obama administration has recently opposed a number of proposed acquisitions. The Justice Department sued last month to stop mergers between Halliburton and Baker Hughes—two major players in the oil services industry. Last week, the deal was called off by the two companies.
In April, the Treasury Department also issued new rules to stop overseas inversions: when US corporations merge with a foreign entity to reduce their tax bill. The initiative forced drugmaker Pfizer to drop its move to acquire the Irish pharmaceutical outfit, Allergan.
The Obama administration has denied, however, that it is making any kind of concerted effort to oppose integration between competitors.
Assistant Attorney General Bill Baer, head of the Justice Department’s Antitrust Division, recently told USA Today that his office is “not changing” its approach. He said it is merely reacting to an economic trend, telling the paper that corporate executives have displayed new “enthusiasm” for acquisitions, with “all that capital coming back into the marketplace.”
Last month, for example, the Justice Department and the Federal Communications Commission said they wouldn’t oppose a deal that would see Time Warner Cable merge with Charter Communications—if the companies abide by a number of conditions. If it goes through, the merger will create the second largest internet provider in the country.
