AMSTERDAM (Reuters) - Office goods supplier Staples won approval from Corporate Express on Wednesday to take over the Dutch firm with an increased bid of 1.7 billion euros ($2.65 billion).
STAPLES(SPLS.NQ)is offering an all-cash offer of 9.25 euros per share, up from a revised bid of 9.15 euros announced last week and compared to the 7.25 euros it offered in February.
"Staples and Corporate Express will create the world's premier provider of office products," Corporate Express said in a statement, adding it has ended a plan to buy privately owned French rival Lyreco, seen as an attempt to fend off Staples.
Analysts have said a tie-up between Staples and Corporate Express would make strategic sense and could lead to big savings as both try to cope with a slowing U.S. economy.
Staples said in a statement the firms had combined annual revenues of $27 billion with more than 94,000 employees.
Corporate Express said its boards unanimously recommended the offer, which expires on June 27 at 1530 GMT.
Staples said the deal gave Corporate Express an enterprise value of about 3.1 billion euros, including about 1.7 billion euros in equity with 182.9 million ordinary shares outstanding.
It said prior to entering into the agreement it had purchased about 1.1 percent of the outstanding shares for 9.25 euros.
In addition to offering 9.25 euros for its shares, Staples is also offering to buy Corporate Express' 2 percent subordinated convertible bonds due 2010 and has already acquired most of its outstanding 2014 and 2015 notes.
Corporate Express Chief Executive Peter Ventress will take a new position as president of Staples International to oversee business outside of North America and play a key role in managing the integration of the two companies.
Staples said it expected settlement of the offer in July and that it had sufficient cash reserves and funds available under its existing revolving credit facility to fund the deal.
(Reporting by Foo Yun Chee; Editing by David Cowell and Jason Neely)