The ODP Corporation has declined to split up its Office Depot and OfficeMax businesses or to pursue a sale, following a review of both public and private non-binding proposals. The retailer’s Board of Directors unanimously determined that divesting the consumer business is not in its best interest at this time, but did not rule out a future spinoff. Instead, ODP will continue as a single business structured into one B2C business and three distinct B2B businesses:
- Office Depot will operate the retailer’s 1,000 Office Depot and OfficeMax locations, as well as officedepot.com;
- ODP Business Solutions will focus on serving small, medium and enterprise companies through businesses including the contract sales channel that was formerly called Office Depot Business Solutions, Canadian distribution network Grand & Toy and office supply distribution business Federation Entities;
- Veyer will manage supply chain, distribution, procurement and global sourcing operations and both procure and distribute products for Office Depot, ODP Business Solutions and third-party customers; and
- Varis will operate as ODP’s B2B digital platform technology business, with a focus on transforming digital commerce between buying organizations and suppliers.
“Given current market and macroeconomic conditions, as well as the benefits of maintaining purchasing and supply chain synergies, the Board has determined that now is not the right time to further pursue separating the company into two independent, publicly traded companies,” said Joseph Vassalluzzo, Chair of the Board of Directors of The ODP Corporation in a statement. “However, the completion of our internal reorganization will make such a potential separation substantially simpler should the company determine to resume the separation process following a change of market conditions in the future.”
Office Depot has been exploring a potential sale for well over a year, including a $2.1 billion bid from Staplesthat the retailer rejected in January 2021 due to regulatory risks. ODP noted that it was still open to other options, including the possibility of splitting into two companies: ODP, which would have operated the retail business; and NewCo, which would have inherited the B2B business.
Staples made another approach for ODP’s consumer business, including both its Office Depot and OfficeMax stores, for $1 billion in June 2021. This offer was rejected as well.