Tech Industry

Staples, Office Depot may have the urge to merge -- report

Faced with sluggish sales, the two chains are once again eyeing a deal to join forces, says the Wall Street Journal.

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Office supplies are the thing at Office Depot, and Staples too. Office Depot

Staples and Office Depot reportedly are talking about becoming one single company.

The two office supply chains are in "advanced talks to combine," the Wall Street Journal said Tuesday, citing people familiar with the matter. The sources didn't provide any details on the price or structure of the potential deal, the Journal said. And the deal is not even a sure thing, the sources added.

Combined, the two companies own around 4,000 stores and see annual sales of more than $35 billion. But the two have been hit by increased competition from online retailers such as Amazon as well as chains such as Target and Wal-Mart, which also sell office supplies and consumer electronics.

Staples' same-store sales in North America have been flat since 2007, the Journal said, while Office Depot's sales have failed to increase since 2006. In the wake of greater competition, Staples announced last year that it would close as many as 225 stores between by the end of 2015.

Assuming the Journal's sources are right, this wouldn't mark the first time the two companies have tried to become one.

In 1997, the two attempted a merger, which was stifled by antitrust regulators. But with more retail chains and choices now available to retail customers, a merger attempt in 2015 may not run into roadblocks getting approval, according to analysts.

In 2013, Office Depot received unanimous approval from the Federal Trade Commission to acquire OfficeMax. In announcing its decision at the time, the FTC cited the changes in competition faced by office supply stores in 1997 versus 2013.

"Customers now look beyond office supply superstores when buying office supplies," the FTC said. "Non-office supply superstores such as Wal-Mart and Target, along with club stores like Costco and Sam's Club, have expanded their office supply product offerings and now compete with office supply superstores. Additionally, Internet retailers of office supplies, most prominently Amazon, have grown quickly and significantly, and compete with office supply superstores."

Neither Staples nor Office Depot immediately responded to CNET's request for comment.