Office Depot Inc. (ODP) hired grocery executive Roland Smith as
its new chairman and chief executive, crossing one major task off
its to-do list a week after it closed a $1.2 billion merger with
peer OfficeMax Inc.
The food-industry veteran has a longer list than usual of steps
to integrate the two companies, because key decisions like where it
would be based and how it would be led were intentionally put off
until antitrust authorities signed off on the deal.
OfficeMax, the smaller company in the deal, insisted on leaving
those questions open so it wouldn't shed customers and employees
while the government reviewed the deal, two people close to the
merger negotiations said. The caution was in part conditioned by a
fear that the Federal Trade Commission could use the same reasoning
to kill the deal as it did in 1997 when it rejected a proposed
merger between Office Depot and Staples Inc. (SPLS).
The FTC approved the merger Nov. 1. Office Depot now needs to
decide whether it will consolidate its head offices in Naperville,
Ill., home to OfficeMax's headquarters, or in the standalone Office
Depot's home base in Boca Raton, Fla. Mr. Smith, 59 years old, is
based near Atlanta.
"I fully understand that we need to make a headquarters decision
quickly," Mr. Smith said Tuesday.
Shares of the office supply chain rose 3.1% to $5.37 in
after-hours trading. The executive appointment was effective
immediately.
In addition to stitching together the two companies, Mr. Smith
faces vast challenges as the office-supplies sector struggles with
tougher competition from online sellers and shifting demand for
office technology that has pressured sales.
He previously served as chief executive of Delhaize Group's
(DEG, DELB.BT) U.S. division, owner of grocery chains Food Lion and
Hannaford. He also led fast-food chains Arby's and Wendy's Co.
(WEN). The West Point graduate served in the U.S. Army for seven
years.
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