OfficeMax 2014 Annual Report Download - page 14

Table of Contents
and certain other customary conditions, including, among other things, the absence of laws or judgments prohibiting or enjoining the merger and the receipt
of certain regulatory approvals. We cannot predict with certainty whether and when any of these conditions will be satisfied. We are subject to putative class
action lawsuits challenging the Staples Acquisition, which seek, among other things, to enjoin the consummation of the Staples Acquisition. In addition, the
Staples Merger Agreement may be terminated under certain specified circumstances, including, but not limited to, a change in the recommendation of our
Board of Directors or a termination of the Staples Merger Agreement by us to enter into an agreement for a “superior proposal”. If the Staples Merger
Agreement is terminated, we may be required to pay Staples a termination fee of $185 million. If the Staples Acquisition is not consummated, our stock price
will likely decline as our stock has recently traded based on the proposed per share price for the Staples Acquisition. We will have incurred significant costs,
including, among other things, the diversion of management resources, for which we will have received little or no benefit if the closing of the Staples
Acquisition does not occur. A failed transaction may result in negative publicity and a negative impression of us in the investment community. The
occurrence of any of these events individually or in combination could have a material adverse effect on our results of operations and the market price of our
common stock.
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We completed a merger with OfficeMax on November 5, 2013, pursuant to which OfficeMax became an indirect, wholly-owned subsidiary of our Company.
The Merger involved the integration of two companies that previously operated independently with principal offices in two distinct locations. We have
devoted, and will continue to devote, significant management attention and resources to integrating the companies. As previously disclosed, the combined
company is expected to capture over $750 million in cost synergies by the end of 2016, including at least $100 million in annual run-rate synergies from
store closures. Additionally, in response to economic and competitive factors in our industry, we may, from time to time, undertake certain restructuring
activities within our business divisions to improve our performance. In recent years, the International Division has undergone significant restructuring
activities, including disposing of assets and streamlining processes, primarily in Europe in an effort to be more responsive to customer needs and further
improve processes. In 2014, the International Division launched a European-wide restructuring plan to realign the business organization from a geographic
focus to a business channel focus. As previously disclosed, this plan is expected to provide $90 million of annual cost savings by the end of 2016.
We may not be able to achieve the expected Merger synergies or restructuring benefits due to certain risks, among other things, risks that:
• the businesses of Office Depot and OfficeMax may not be integrated successfully or such integration may take longer, be more difficult, time-
consuming or costly to accomplish than expected;
• we may experience business disruption following the Merger, including adverse effects on employee retention and loss of employee focus during
periods of restructuring activities;
• we may be unable to avoid potential liabilities and unforeseen increased expenses or delays associated with the Merger integration or other
restructuring activities, including in Europe;
• there may be unanticipated changes in the markets for the combined Company’s business segments;
• branding or rebranding initiatives may involve substantial costs and may not be favorably received by customers;
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