Office Depot to buy OfficeMax

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Details on the deal were limited, as it was announced deep within the Office Depot earnings report. There were no estimates of cost savings, staffing cuts or store closings. The report did not say whether they will operate under both brands or use only one name.

The deal is clearly an attempt for the two companies to compete with larger rival Staples (SPLS, Fortune 500).

Office Depot has 1,629 stores worldwide and 38,000 employees.

Office Max had 978 stores and 29,000 employees in 2011, the most recent full year it has reported.

Staples operated 2,248 stores worldwide in 2011 and has 90,000 employees.

All the companies in this business have faced increased competition from online retailers such as Amazon (AMZN, Fortune 500).

OfficeMax shareholders will 2.69 shares of Office Depot stock for each of their shares. That is only about a 4% premium, based on Tuesday’s closing stock prices. But OfficeMax shares had closed up nearly 21% in Tuesday trading based on widespread reports of the deal. Office Depot shares had closed up 9%.

Both company’s share prices were up more than 10% in premarket trading Wednesday, raising the potential value of the deal. Staples shares are also higher in premarket trading. It could benefit from store closings in the deal.

The deal comes as mergers and acquisitions have picked up.

By Chris Isidore @CNNMoney

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