Office Depot Inc., a major sales-tax revenue generator for the cities of Signal Hill and Long Beach, expects to merge with OfficeMax Incorporated by the end of the year, according to a company statement.
An April 9 announcement states that the companies are required to submit additional information and materials to the Federal Trade Commission (FTC) to complete the transaction by the end of 2013. A committee made of existing executives from both companies will oversee the process of selecting a new CEO and other executives for the combined company.
“Today’s announcements mark a key milestone in our vision to help shareholders and customers of both companies realize the tremendous value inherent in our proposed combination,” said Neil Austrian, chairman and CEO of Office Depot in a statement, adding that the merger will help both companies better compete in a “rapidly changing industry.”
According to the statement, the companies remain “optimistic” about the regulatory process and will continue to work cooperatively with the FTC as it conducts its review of the proposed merger.
A spokesperson for Office Depot said “no decisions have been made yet” regarding facilities or if there will be any operational changes due to the merger, adding that more information will be provided once the companies receive approval from the FTC.
Ravi Saligram, president and CEO of OfficeMax, stated that the goal is to create an $18-billion global office-solutions company. Both companies remain “committed to working toward completion of the proposed combination by the end of calendar [year] 2013,” he stated.
For more than a decade, Office Depot has operated a 600,000-square-foot distribution center, known as the Business Services Division, at Willow Street and Redondo Avenue– located in both Long Beach and Signal Hill– where products are shipped out to various businesses. The company also has warehouses and offices in the local area in addition to a retail store at 2301 E. Willow St. in Signal Hill.
Last year, the cities of Signal Hill and Long Beach entered into a 70-percent sales-tax rebate with Office Depot for a 15-year term as an incentive for the office-supply company to stay at the location, according to a previous article by the Signal Tribune.
The arrangement, which involves a joint-powers authority, allows Signal Hill to receive 60 percent and Long Beach to receive 40 percent of the remaining sales-tax revenue after Office Depot takes advantage of the rebate. Under the agreement, Office Depot is required to generate at least $500,000 in minimum sales-tax revenue for Signal Hill from January to June 2013.
Even with the rebate, however, Office Depot remains one of the top 25 sales-tax revenue generators in Signal Hill, said Elise McCaleb, Signal Hill’s economic development manager, who said the retail location in Signal Hill recently underwent major façade improvements. Several years ago, OfficeMax closed its Signal Hill location at 1851 E. Willow St. where there is now a 99 Cents Only store, she said.