French (Oops, Freedom) Acquisition

Office Depot Inc. (Delray Beach, Fla.), recently supplanted as the country's top office supply retailer by Staples Inc. (Framingham, Mass.), has announced the proposed acquisition of Guilbert SA (Senlis Cedex, France) from Pinault-Printemps-Redoute Group (Paris) for 815 million euros, or about $872 million.

Guilbert, a non-retailer, is Europe's largest supplier of office products, with operations in Belgium, France, Germany, Ireland, Italy, the Netherlands, Portugal, Spain and the U.K. A warehouse and delivery company, Guilbert sells directly to large business and government agencies and has no retail stores.

Office Depot ceo Bruce Nelson indicated that his company could see savings of 1 or 2 percent in supply costs and up to 5 percent in delivery costs. He noted that Guilbert has its own delivery truck fleet. “We think their delivery system is superior to ours,” Nelson said. “That is one of the ways they would add value to our business.”

Office Depot spent $50 million last year for European start-up operations. It recently opened six stores in Spain and already has 37 stores in France. It also runs a mail order business in Europe.

Nelson said the deal has been in the works for about a year and is still subject to European Commission oversight. Guilbert must also consult with its workers' council, but Nelson said. “All our work and effort leads us to believe it will not be a problem competitively.”

Pinault-Printemps Redout, primarily known in the U.S. as the owner of Gucci Group NV, has been paring back to focus on luxury items. Staples snatched up Guilbert's mail order business in October.

In 2002, Staples slipped past Office Depot as No. 1 office supply retailer, registering sales of $11.6 billion to its competitor's $11.4 billion. Guilbert generated 1.4 billion euros, or $1.49 billion, in sales in 2002.