Two office supply giants are becoming one, as Staples has just announced its acquisition of Office Depot. The deal is worth $6.3 billion.

“This is a transformational acquisition which enables Staples to provide more value to customers, and more effectively compete in a rapidly evolving competitive environment,” said Ron Sargent, Staples’ chairman and chief executive officer. “We expect to recognize at least $1 billion of synergies as we aggressively reduce global expenses and optimize our retail footprint. These savings will dramatically accelerate our strategic reinvention which is focused on driving growth in our delivery businesses and in categories beyond office supplies.”

The $1 billion is cost reduction will come from some layoffs, as well as “efficiencies in purchasing, marketing, and supply chain, retail store network optimization, as well as sharing of best practices.”

The two companies had been in talks since September of 2014.

“This transaction delivers great value for our shareholders and creates a company ideally positioned to serve our customers and grow over the long term,” said Roland Smith, chairman and chief executive officer for Office Depot, Inc. “It is also an endorsement of our many accomplishments and the tremendous success we’ve had integrating Office Depot and OfficeMax over the past year. We look forward to bringing our experience and knowledge to the new organization.”

It appears that the two realized that with a combined 4,000 stores, they would be stronger together than apart. Both companies have faced increasing competition from the likes of Amazon on the online front, as well as other big-box retailers like Wal-Mart.

Image via Lizsummers, Wikimedia Commons