Four leading independent dealer organisations in the US have joined forces to voice their concerns to the Federal Trade Commission (FTC) regarding Staples’ acquisition of Essendant.
TriMega, Independent Stationers (IS), AOPD and NOPA are cooperating to hire the services of a law firm that is specialised in antitrust and FTC issues. The goal is to produce a letter for the FTC – the competition authority that is investigating the Staples/Essendant deal – that details specific reasons against the transaction and provides guidance on conditions the FTC should impose on Staples if the transaction is not blocked outright.
Areas that the groups want the FTC to look at include the separation of Essendant and Staples’ data, maintaining Essendant private label brands and potentially the divestment of some Essendant distribution centres to SP Richards.
TriMega’s larger dealers have already committed to sending the letter to the FTC and the dealer group is encouraging all its other members to send the letter as well.
TriMega President Mike Maggio – who reached out to the other groups to see if they would cooperate on this – said the letter would have even greater impact if members of other dealer organisations also sent the letter to the FTC.
Staples CEO Sandy Douglas confirmed to OPI last week that Staples would put a firewall between its own data and that of Essendant and its dealer customers. Staples has also confirmed that it will put up this firewall whether it is required to do so by the FTC or not.
Nevertheless, IS CEO Mike Gentile told OPI that dealers are still “very concerned” about the issue of data and there is still a high level of scepticism about Staples’ assurances.
Maggio added: “I believe that Staples and Essendant are sincere in their comments that, on day one, ‘nothing will change’, and that this acquisition ‘is in the best interests of independent dealers’. However, experience tells us that change is a constant in this industry and happens quickly!
“Day one is not the concern, but a year, two years, down the road as changes occur. Will Staples/Sycamore stay committed to Essendant operating independently from Staples? Will they be required to maintain the requirements imposed by the FTC to allow the acquisition to proceed? We would like answers to those questions along with assurances that the protections imposed by the FTC to prevent Staples from having access to everything from independent dealer customer usage and pricing to confidential financial information are off limits and will not be compromised.”
Washington (DC), USA