ROANOKE TIMES 
                      Copyright (c) 1997, Roanoke Times

DATE: Saturday, April 5, 1997                TAG: 9704070074
SECTION: BUSINESS                 PAGE: A-5  EDITION: METRO 

IN BUSINESS

FTC plans suit to stop office supply merger

WASHINGTON - The government will go to court next week to stop a scaled-down merger of the nation's two largest office supply chains.

The Federal Trade Commission voted 4-1 Friday to reject an offer by Staples Inc. and Office Depot Inc. to sell to their biggest competitor part of the combined superstore empire they've envisioned.

Commission officials say they will argue in court that, even with that concession, the merger would increase prices for consumers in markets across the country.

``This merger is all about eliminating head-to-head competition,'' said William J. Baer, director of the FTC's Bureau of Competition. ``If it's allowed to go through, consumers will pay more in city after city across the country.''

Staples Chairman and CEO Thomas G. Stemberg said he was taken aback by the ruling because the commission staff's had encouraged the companies to pursue a restructured deal that included the sale of 63 to third-ranked competitor Office Max.

``The Federal Trade Commission has decided to put itself between ourselves and lower prices,'' Stemberg said.

Stemberg said he estimates Staples and Office Depot have spent $10 million trying to please regulators and will now have to decide together whether to give up their plans or fight the FTC in court.

-ASSOCIATED PRESS

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