Office Depot, OfficeMax move forward on merger
NAPERVILLE, Ill. & BOCA RATON, Fla. — OfficeMax and Office Depot have announced the committee members tasked with overseeing the process to select a CEO for the combined company and selection of the executives who will help to manage the integration planning process.
Office Depot board member Nigel Travis, CEO of Dunkin Donuts, and OfficeMax board member Jim Marino, former president and CEO of Alberto Culver Company, will co-chair the selection committee. The other members are Office Depot directors Tom Colligan and Marty Evans; Rakesh Gangwal, non-executive chairman of the board of OfficeMax; and OfficeMax director Francesca Ruiz de Luzuriaga.
The committee will oversee a comprehensive search process that will consider both incumbent CEOs - Neil Austrian, chairman and CEO of Office Depot and Ravi Saligram, president and CEO of OfficeMax - as well as external candidates. The committee will proceed with the objective of selecting the CEO for the combined company at or prior to the closing of the transaction.
In addition, Office Depot and OfficeMax also announced the selection of key executives from both companies who will oversee the integration planning process for the combined company.
Messrs. Saligram and Austrian will provide overall sponsorship and stewardship of the integration planning process. Together, they have appointed OfficeMax EVP, CFO and chief administrative officer Bruce Besanko and Office Depot EVP and CFO Mike Newman to co-chair the integration planning process, with the shared objective of mutually developing an integration plan designed to ensure a smooth and productive transition and capture the projected $400 to $600 million in annual cost synergies by the third year following the transaction's close.
"Today's announcements mark a key milestone in our vision to help shareholders and customers of both companies realize the tremendous value inherent in our proposed combination," said Austrian. "By bringing together several of our top executives and board members to focus on the process of integrating our two great companies, we will build on our culture of collaboration as we move closer to successfully closing the transaction and better competing in this large and rapidly changing industry."
"The formation of the CEO selection committee and launch of our integration planning process represent important steps forward in achieving our vision of an $18 billion global office solutions company," said Saligram. "We are very pleased to have launched a comprehensive integration planning process and remain confident in the combined company's ability to deliver the targeted cost synergies and to more rapidly scale key market innovations. Both companies also remain committed to working toward completion of the proposed combination by the end of calendar 2013."
Office Depot today filed a registration statement on Form S-4 with the U.S. Securities and Exchange Commission, which includes a joint proxy statement of OfficeMax and Office Depot and a prospectus of Office Depot. This filing provides important business and financial information about the companies, the proposed merger of equals and related matters.
As anticipated, the companies also confirmed that each company yesterday received a Request for Additional Information and Documentary Materials ("Second Request") from the Federal Trade Commission ("FTC") in connection with the proposed merger. A Second Request extends the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, during which the parties may not close the transaction until 30 days after OfficeMax and Office Depot have substantially complied with the Second Request (or the waiting period is otherwise terminated by the FTC). Office Depot and OfficeMax expect to respond promptly to the Second Request.
The companies remain optimistic about the regulatory process and will continue to work cooperatively with the FTC as it conducts its review of the proposed combination.
On February 20, 2013, OfficeMax and Office Depot announced their entry into an agreement to combine their companies in a merger of equals aimed at building a stronger, more efficient competitor able to meet the growing challenges of a rapidly changing industry. The merger process is ongoing, and, as was stated in the February announcement, the transaction is expected to close by the end of calendar year 2013, subject to stockholder approval from both companies, the receipt of regulatory approvals and the satisfaction of other customary closing conditions.