It may not have the glitz or financial heft of Microsoft Corp.'s $47.5 billion bid for Yahoo! Inc., but the story line of Staples Inc.'s unsolicited $2.3 billion bid for Corporate Express NV of Amsterdam is so far hitting the same dramatic high points. That is months of unsuccessful attempts by the buyer to privately engage its target, a
public appeal for talks, a rejected offer, a sweetened bid, another rejection and a threat to take the deal to shareholders. The Deal's Laura Board has the details
here.
We don't know how this story will end. What we do know is that this deal is strategically significant for Staples, which is looking to ease the hurt of a sluggish U.S. economy with international expansion. Retail sales in North America were flat in 2007, up just 1%, while international sales jumped 16% in U.S. dollars. All told, Staples, which will announce first-quarter earnings on May 20, posted retail sales of $19.4 billion last year, up 7% from 2006.
Staples already does business in 22 countries in North and South America, Europe and Asia. Last year it entered India through a joint venture with Future Group, and it expanded its presence in China with a unique joint venture with UPS, opening two Staples-UPS Express stores in the country. Sales in China, where Staples operates 32 stores, doubled in 2007 to $200 million. A tie-up with Corporate Express, a pure-play distributor of office supplies and computer products, would significantly expand Staples' European footprint and give the U.S. retailer a presence in Australia and New Zealand.
Now there are some notable strategic differences between Staples play for Corporate Express and Microsoft Corp.'s pursuit of Yahoo!. Microsoft wanted Yahoo! to help it better compete with Google Inc. in search. Staples wants Corporate Express to expand its global presence. Does that make Staples pursuit of Corporate Express more pressing than Microsoft's play for Yahoo!? In the short term, yes. After years of aggressive expansion in North America, growth opportunities for Staples here are limited. And that, perhaps makes it less likely that Staples chief executive Ron Sargent will pull a Steve Ballmer and walk away from his target.
- Suzanne Stevens
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