The tough economic times are definitely making more businesses look into different options to stay afloat. Merging with another company can sometimes save a business.
Accountant and Chamber of Commerce board member Trent Benedetti says, "all companies are trying to be more competitive."
Benedetti says most mergers happen when two companies need a boost in order to keep up with the competition. Office Depot and OfficeMax were the number two and three office supply chains in the U.S. Staples is number one. The mindset is that merging both assets together is better than one company trying to stay afloat by itself.
"They think it will put them in a better position to compete in the marketplace," says Benedetti.
Benedetti says most brick and mortar stores are also suffering from an increase in online sales.
"They are looking at the competition from online retailers as well as big box retailers," says Benedetti. "It's taken a lot of business away from smaller stores."
But mergers don't always give the initial upper hand to the companies who are joining forces. Reports show that Staples may actually benefit from the Office Depot and OfficeMax merger. The combined company will likely close certain locations.
"There are of course going to be closures of stores that will be in markets that are too close to each other so there will be layoffs. That's the downside," says Benedetti.
