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 have turned to acquisitions to increase profits but this 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-competitive practices of private equity when assessing private equity-driven mergers. Private equity funds have had a devastating effect on retail across America. When one such 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 equity funds also try to eliminate the competition. 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 the paper supply company Dunder Mifflin from "The Office"? The merger puts even more suppliers like them at the mercy of Staples -- something our investigation overlooked."3 Staples has already been closing stores and cutting jobs. If this merger goes through, matters will get much worse. Chopra's own statement explained why this and other private equity-led mergers are so damaging.4 He has called on the public to weigh in and tell the FTC to stop this merger. He's right. We have until the end of the month to speak out. The FTC doesn't get very many public comments, and so your comment could make a major difference. Time is running out as the FTC's only taking public comment until Wednesday. Will you help?