As activist investor Starboard Value urges Staples to merge with smaller rival Office Depot, Anthony Chukumba, managing director and senior research analyst at BB&T Capital Markets, says a deal between the two makes a lot of sense. Chukumba says he believes Starboard is accurate in predicting large synergies between the two companies in terms of merging distribution centers, sales forces and increased purchasing power as the result of a deal. As both Staples and Office Depot face increasing competition from online retailers, Chukumba says the combined $39 billion company would be in a much better position to combat e-commerce retailers like Amazon. He believes now is an ideal time for the companies to merge, especially given the Federal Trade Commission’s current stance on industry consolidation.
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