Beware the hungry giant



So Lyreco and Corporate Express are to unite, a merger that has simultaneously created the world’s largest supplier of B2B stationery and ruffled more than a few feathers at Staples HQ. The timing was immaculate, the execution – considering how very few had predicted it – was perfect.
At the official press conference for the announcement both Peter Ventress and Eric Bigeard seemed to enjoy the afterglow of their coup de grace. As they revealed the details of the mutually beneficial agreement to merge – allegedly signed early in the hours of the morning (and far too early to open the champagne, apparently) – it was hard not to admire the sheer balls of the move.
The idea of a furtive pledge sealed at night while the giant stomped looking for bone and gristle outside may yet become the stuff of industry legend. But it is worth remembering that Bigeard and Ventress are not peasant princes but a French and English king of two of the largest domains the OP world has to offer.
However, it wasn’t the audacity that stunned, it was the fact that nobody seemed to see it coming. It is a breathtaking achievement considering the intimate nature of this industry and its two degrees of separation between individuals. Even with hindsight it seems so unlikely. Afterall, don’t we live in a time where people bemoan that technology means it is impossible to keep the world out? Apparently not. It would seem even in the age of Google, there is still an event horizon, beyond which it is dangerous to second guess the thoughts of whispering conspirators.
The beauty of the deal is that it suits both men. Each has now spurned Staples’ advances in fear their companies would be sucked into the behemoth presumably never to be seen again.
Ventress has certainly given his shareholders a real alternative to the Staples’ offer although it is questionable that they will fully share his enthusiasm for independence before dividends.
Out of the personalities involved, surely Bigeard stands to gain the most. Apart from his 2.5 percent share, he has also inherited the leadership of the new group.
It is difficult to imagine how the charismatic Frenchman would have adjusted to life in Framingham and, as persuasive and strong a character that Bigeard is, it is inconceiveable that Ron Sargent would want to surrender the position of CEO to capture Lyreco.
So what next for Staples? Perhaps it will go ultra-aggressive and step-up its bidding and dupe Lyreco. Or it may step back and see how the newly formed group organises itself.
Staples will be hoping that when the two companies stand eye-to-eye, it will be on surer footing than a company run by two men, one on the shoulders of the other, struggling to stay upright.
In any case, life had threatened to get dull after the conclusion of the Office Depot manoeuvrings and this story, as beautifully unexpected as it was, is just the tonic. Read the News in Depth "Ventress plays his hand" for the full story.