ODP ODP Corporation

Staples Inc., which has received regulatory pushback over its deal to buy Office Depot Inc., has agreed to sell certain wholesale contracts to Essendant Inc. for about $22.5 million.

The contracts, which represent annual sales of more than $550 million, are with minority and woman-owned office supply resellers, Essendant said.

Essendant sells a variety of workplace products including technology products, office furniture and janitorial items.

In a separate statement, Staples said "we're pleased to reach this agreement with Essendant as we continue to work to complete the acquisition of Office Depot."

The Essendant deal is subject to the closing of the Office Depot purchase.

Staples agreed in February 2015 to buy Office Depot for about $6.3 billion.

The FTC rejected Staples' first attempt to buy Office Depot in 1997. In 2013, the agency approved Office Depot's takeover of the smaller OfficeMax.

The distinction between the retail market for everyday office and school supplies and the big business of supplying corporate and government clients under contract was expected to be a factor as regulators looked into the deal.

The consumer market features tough competition from the likes of Wal-Mart Stores Inc. and Amazon.com Inc.

Staples Chief Executive Ron Sargent has said the company faces a number of competitors in its contract business. In February 2015 he said "there are really strong regional players" and noted that Amazon had launched a business-to-business office products initiative.

Staples said Tuesday that about half of the revenue in the contracts to be sold is from Fortune 500 companies. Staples said the deal "further strengthens Essendant as national office supplies competitor."

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

February 16, 2016 17:35 ET (22:35 GMT)

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