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ACCC weighs ‘Amazon Effect’ in OfficeMax review

Thursday, 08 June 2017
By Print 21 Online Article

Corporate regulator the ACCC has closed submissions in its review of the proposed takeover of OfficeMax by US equity firm Platinum Equity and expects to announce a decision next month.

Platinum Equity, which recently acquired the Staples business in Australia and New Zealand, announced in April that it proposes to buy OfficeMax in Australia and New Zealand.

The ACCC is conducting a public inquiry – including consultation with customers and competitors – to assess the likely effects that the deal could have on competition.

In Australia, Staples and OfficeMax supply office products, primarily to business and government customers through online ordering platforms. The ACCC’s review is focused on the impact on competition. In particular, we are seeking your views on:

•          whether prices of office products will increase, or service levels decrease, as a result of the proposed acquisition
•          how closely Staples and OfficeMax compete with each other in terms of product range, pricing, types and sizes of customers, and geographic areas of supply
•          the extent of competition from other office products suppliers such as Complete Office Supplies (COS), Lyreco and Officeworks
•          how easy it would be for existing competitors to expand and/or new competitors to enter the market and constrain pricing and service levels provided by the merged Staples/OfficeMax.

The regulator also asked:

Amazon recently announced that it plans to establish operations in Australia. To what extent would Amazon be likely to provide a competitive constraint on a merged Staples/OfficeMax in relation to supply of office products to large business and government customers?

 Stockbroker Morgan Stanley estimates Amazon will take $12 billion out of the Australian retail market over the next decade.

OfficeMax’s print management division, OfficeMax Print Solutions, offers a range of services from pre-production and design to procurement, marketing and distribution. Staples also offers a range of print and marketing services. Platinum Equity is a California-based global investment firm with more than $11 billion of assets under management.

The regulator has set 20th July 2017 as the provisional date for its decision, which could be a final decision or the release of a Statement of Issues.




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