European Authorities To Approve Staples-Office Depot Under Several Conditions

Shares of Staples, Inc. (NASDAQ: SPLS) were trading higher by more than 3 percent on Wednesday after European Union regulators approved its pending merger with Office Depot Inc (NASDAQ: ODP) on several conditions.

According to The New York Times, European regulators said that the merger can be approved if the two companies agree to sell Office Depot's contract distribution business to ease anti-competitive concerns. Office Depot is also required to sell its entire business in Sweden.

"The substantial remedies package offered will ensure that effective competition is maintained, in particular on the E.U.'s international office supplies market," The New York Times quoted Margrethe Vestager, the commissioner in charge of European competition policy as saying in a news release. "This will allow European companies to continue to benefit from the single market by procuring their office supplies internationally and to reduce costs."

Staples said in a press release that it is prepared to meet the requirements and will also divest Office Depot's retail, online and catalog operations in Europe.

"This is a significant step, and we're very pleased that the European Commission has approved this transaction," Ron Sargent, Staples's CEO said in the company's press release. "The acquisition has been approved in Australia, New Zealand, China, and Europe. Regulatory agencies around the world understand that this acquisition will allow Staples to provide increased value and service to customers of all sizes. We look forward to a full, impartial judicial review in the United States."

Shares of Office Depot were higher by nearly 5 percent on Wednesday.