Originally posted at 6;40 p.m. Updated with after-hours trading halted
The judge overseeing the U.S. lawsuit seeking to stop Staples Inc.’s purchase of Office Depot Inc. blocked the merger.
The judge issued the ruling after the market closed today, May 10.
Office Depot shares were down 26 percent and Staples stocks 10 percent in extended trade after the judge’s announcement, before after-hours trading was halted.
Judge Emmet Sullivan sided with the Federal Trade Commission. The judge cited risks to customers and said the merger was anti-competitive.
In January 2016, Staples, Inc. and Office Depot, Inc.announced the Board of Directors of both companies waived the merger agreement termination date of February 4, 2016, and extended it to May 16, 2016.
The extension allowed for the completion of ongoing federal district court litigation with the Federal Trade Commission.
The companies were working to extend financing terms for the transaction, and expect to execute the merger extension agreement once financing terms are finalized.
“This merger creates an unparalleled opportunity to better serve our customers and to deliver shareholder value,” said Ron Sargent, Chief Executive Officer of Staples, in a statement in January. “We are committed to completing this transaction and look forward to a full and impartial judicial review.”
The deal is likely to take place now.
In 2015, the Federal Trade Commission said the merger should not take place.
The FTC had said a merger between the two companies would reduce competition for office supplies.
Staples and Office Depot challenged that ruling in court.
In February 2015, Staples announced an estimated $6 billion deal to purchase rival Office Depot.
Staples’ worldwide headquarters is in Framingham.