On Tuesday, an executive with Amazon.com unit, which sells office supplies to companies and establishments, released a statement that appeared to bolster a U.S. regulator's wariness over a possible merger of Office Depot Inc. and Staples Inc.
According to the New York Post, the deal would involve Amazon, which is believed to be targeting the corporate business unit of Office Depot. Although there has been no decision yet whether Jeff Bezos's $272 billion market-cap company will seal a deal, there has been speculations on Wall Street that the chief executive is eyeing an expansion to Amazon Business.
Bloomberg Business reported that Amazon is having a difficulty in winning the primary office-supply contract with companies, undercutting an important argument Staples is making to defeat U.S. opposition to its planned takeover of its competitor, Office Depot.
In 2015, the U.S. Federal Trade Commission filed a lawsuit to prevent the proposed $6.3 billion acquisition of Office Depot by Staples. The commission argued that it would disrupt competition and prices will experience an obvious upsurge. A preliminary injunction to block the deal is being considered at the moment by a federal judge, reports Reuters.
During the second day of a hearing, vice president of Amazon Business unit, Prentis Wilson, testified that his business had no big corporate customers, did not bid for a customer's business and did not stock shelves. The statement made by Wilson appeared to support the FTC's arguments that online retailers could not deliver the same level of services as Office Depot and Staples.
Staple's lawyer, Diane Sullivan, said in the open arguments that her client feared that Amazon may be planning to enter the office supplies market in a "serious way."
The Amazon executive will then undergo a cross-examination with an attorney for Staples, on Wednesday, while the hearing is expected to last for up to two weeks.
