Staples, Office Depot sell corporate contracts while awaiting merger OK
Staples and Office Depot, the number one and two office supply retailers in the nation, have agreed to sell corporate contracts that generate about $550 million in sales as they await approval of a proposed merger. Essendant, Inc. of Deerfield, Ill., will pay the Framingham retailer about $22.5 million for the business, if the merger with Office Depot is completed. Regulators have been concerned about corporate contract business; together, Staples and Office Depot control 70 percent of the US market for business customers. In December, the FTC took legal action to kill the deal, saying a merger would “eliminate beneficial competition” that helps keep the cost of office supplies low. Staples said it would fight the commission in court, and proceedings are expected to begin in mid-to-late March. Staples and Office Depot have received European approval for the merger after the companies agreed to divest some of its operations there. Regulators in China, New Zealand, and Australia have also approved the merger.
Builders feeling less optimistic about sales
US homebuilders are feeling less confident about their sales prospects ahead of the spring home-selling season, though they remain positive overall that the housing market will continue to improve this year. The National Association of Home Builders/Wells Fargo builder sentiment index released Tuesday slipped to 58 this month, down three points from a revised reading of 61 in January. The index had been hovering in the low 60s since June. Readings above 50 indicate more builders view sales conditions as good, rather than poor. Builders’ view of current sales conditions and a measure of traffic by prospective buyers declined. But their outlook for sales over the next six months edged higher. The latest readings come as the annual spring buying season ramps up.
ADT home security company to be sold
Home security services company ADT has agreed to be purchased by affiliates of Apollo Global Management for about $6.94 billion. ADT shareholders will receive $42 per share. That’s a 56 percent increase from Friday’s closing price of $26.87. The companies said that ADT will be merged with a subsidiary of Prime Security Services Borrower LLC, which is also owned by Apollo. The combined business will operate primarily under the ADT brand and be based in Boca Raton, Fla.
Chinese spend record amount during New Year period
China’s consumers increased spending on travel and entertainment as hundreds of millions of people traveled to spend time with family during the week-long holiday last week. People spent at least 312 billion yuan ($48 billion) during the lunar New Year period, when schools and businesses shut down. That record spending was 31 percent more than during last year’s holidays, according to China UnionPay Co., which runs the national bank card network. Travel transactions were up 42 percent, with the government projecting that people will make 2.91 billion trips during the 40-day festival, which sets in motion the world’s largest annual human migration.
GM to recall 200,000 cars over faulty airbags
General Motors is recalling about 200,000 Saab and Saturn cars in the United States and Canada to replace the Takata driver’s air bag inflators. The move is part of a broader recall of about 5.4 million vehicles announced last month by US safety regulators. Takata inflators can explode with too much force in a crash and hurl metal shrapnel into drivers and passengers. At least 10 people have died worldwide and 139 have been hurt due to the problem. The GM recall includes the Saab 9-3 from 2003 to 2011 and the Saab 9-5 from 2010 and 2011. Also included is the Saturn Astra from 2008 and 2009. Dealers will replace the inflators. Owners will get letters notifying them of the recalls, but since parts aren’t available yet, they’ll have to wait for a second letter before taking cars to dealers.
Customers who bought fraudulent weight-loss book to be compensated
Federal authorities are poised to begin compensating customers who purchased a fraudulent weight-loss book from imprisoned infomercial pitchman Kevin Trudeau. The Chicago Tribune reported that a Federal Trade Commission said in a court filing last week that it will start mailing refund checks within 30 days. It said almost 1.27 million people purchased the book. Trudeau was sentenced in 2014 to a 10-year prison term after jurors agreed he bilked consumers through infomercials for ‘‘The Weight Loss Cure ‘They’ Don’t Want You to Know About.’’ Prosecutors say the book generated $39 million in revenue. The refund money will come from about $8 million worth of Trudeau’s assets that were recovered by a court-appointed receiver last summer.
DeBeers to limit supply amid drops in sales
De Beers will continue to limit diamond supply so the world’s biggest gem miner can help the industry recover from the biggest rout in seven years. The Anglo American Plc-owned unit and Russia’s Alrosa PJSC, which control almost two-thirds of the market, sold more than $1 billion of diamonds in January, exceeding market expectations and sparking concerns that the sales may have been too much too soon. Mining companies cut about a quarter of global supply last year to arrest the 18 percent slump in rough-diamond prices brought on by China’s economic slowdown and an industrywide credit crunch. Initial feedback for holiday sales in the United States, the biggest diamond market, had been positive.
Groupon shares rise after Alibaba buys a stake
Groupon Inc. surged for a second straight trading day, this time after Alibaba Group Holding Ltd. bought a 5.6 percent stake in the online marketplace, rekindling investor interest as the company moves away from its roots as a daily deals provider. The Chinese e-commerce company bought 33 million shares of Groupon, according to a regulatory filing Friday after the close of markets, making it the fourth-largest shareholder in the website that has lost about 80 percent of its value since going public in November 2011. Groupon has struggled since its IPO to spur growth and profit. In November, the company replaced chief executive Eric Lefkofsky with Rich Williams, who has increased the marketing budget in an effort to revive and reinvent the one-time Internet darling. The company has exited 17 countries and now operates in 28 as it continues to streamline its operations internationally.
Sales at Burger King and Tim Hortons rise
Restaurant Brands International on Tuesday reported a fourth-quarter profit that beat expectations, as a key sales figure rose at Burger King and Tim Hortons. Sales at established Burger King locations globally rose 3.9 percent in the period, while the figure rose 6.3 percent at established Tim Hortons locations. In the United States and Canada, the company said Burger King’s sales rose 2.8 percent at established locations as menu items such as the A.1. Halloween Whopper and Chicken Fries helped boost sales. RBC Capital Markets analyst David Palmer noted the increase was below the 5.7 percent growth for McDonald’s and 4.8 percent growth for Wendy’s in the period.