Office Depot Inc. has reached an agreement to merge with smaller rival Office Max Inc. in a $2.3 billion transaction, after a slew of recent media reports claimed that the negotiations were ongoing.

The likelihood of the deal, which had been rumored for years, increased after a draft of a press release announcing the news was posted prematurely early in the morning of Feb. 20 on Office Depot's website. Both companies distributed a joint statement at about 9:30 a.m. EST saying that the two retailers had agreed to combine as a means to cut costs and improve financial strength.

Subscribe Now

Complete access to real-time information and analysis of news and trends in the industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.