In the Matter of Staples/Essendant, Inc., File No. 1810180 #01704

Submission Number:
01704
Commenter:
Margaret Murphy
State:
Georgia
Initiative Name:
In the Matter of Staples/Essendant, Inc., File No. 1810180
The FTC needs to step in and block this Staples/Essendant merger, as it presents an unacceptable threat to competition. Private-equity related mergers deserve heightened scrutiny as private equity funds often remove companies from the markets in which they were situated at time of acquisition or drastically reduce the scale of their operations, leading to anti-competitive outcomes by reducing the number and scope of firms in a given market. After the great recession, private equity funds turned to acquisitions to increase profits, which routinely comes at the expense of a company's ability to compete, retain market share, or retain employees. Companies get loaded up with debt and are unable to survive. The FTC needs to stop the Staples/Essendant merger and generally scrutinize the anti-compe-titive practices of private equity when assessing private equity-driven mergers. Private equity funds have had a devastating effect on retail across America. When one equity fund closed Toys R Us last year, 31,000 people immediately lost their jobs. It took a mass public mobilization to get them severance. But that doesn't stop the long-term damage to communities of a major store closure.2 In many cases private eq funds also try to eliminate the competi-tion. In this case, a private equity fund that owns Staples wants to merge it with another office supply company. The result will be to kill off competition -- and eventually, kill off another successful retailer. FTC Commissioner Rohit Chopra, who stands with us in opposing this and other bad deals, used this analogy to explain the problem: "Remember paper supply company DunderMifflin from "The Office"? The merger puts even more suppliers like them at the mercy of Staples -- something our investigation overlooked."3 FINALLY, Staples has already cut to the bone: they have only ONE store inside the Atlanta perimeter!