Merger Analysis The StaplesOffice Depot Case

The affected market in the case of this merger is the office-supply superstore chains market. This market is greatly affected because the merger creates a contestable monopoly in the market. Economically, the merger will be hard to maintain due to the adverse effects it brings on the people and their economic patterns. The market will face huge competition with the merger as it unites companies that own the largest share of the market. They will simply form a formidable entity that is difficult to compete against. hence the office-supply superstore chains market faces a huge test from the merger (Breen, 2004). Analysis of the general effect of the merger on the market is incomplete without assessment of various market factors that it would affect. Some of them include demand patterns, competition, pricing strategies and strength, nature of the market, and cost of operation in the market.
Competition effects
The merger affects competition in the market in the greatest way that any single operation would affect the sector. When the top two firms in any sector in terms of market share come together to form one large entity, the effect is felt by smaller firms. Many of them may exit the market, as they cannot cope with the competition. The office-supply superstore chains merger case is no different (Ashenfelter et al, 2006, p.270). The first effect that the competition will face is market share.