Staples and Office Depot in advanced talks over merger

Negotiations over a merger between Staples and Office Depot were at an advanced stage on Tuesday, according to sources cited by The Wall Street Journal.

The two groups, which have combined annual sales of over $35bn and approximately 4,000 stores across the US, attempted to merge in 1997, only to see the deal blocked by the competition authorities.

Staples has a market value of about $11bn, while Office Depot, which took over sector peer OfficeMax in 2013, is currently valued at $4bn.

However, both groups have been shutting stores as on-line retail has grown increasingly popular.

Staples' North American same-store sales haven't increased since 2007, while Office Depot's haven't grown since the previous 12 months and both groups are suffering from competition from Wal-Mart and Target, which both sell office supplies now.

As of 11:28 on Tuesday in New York, Staples shares were up 8.58% to $18.61, while Office Depot shares surged 18.94% to $9.07.