Liang Feng, a Morningstar analyst, said the combination would be positive for the companies. But he said it might not be enough to help the combined company succeed in the changing marketplace.
"The industry will face longer-term structural headwinds with competitors like Amazon, Costco gaining ground, and the decline in demand for secular office products like paper, pens, and ink," he said.
Office Depot Inc. and OfficeMax Inc., along with bigger rival Staples Inc., were all founded in the mid- to late 1980s and helped pioneer the big-box boom in the 1990s. They expanded rapidly in the United States throughout the decade.
But the rise in competition from such Web retailers as Amazon.com and such discounters as Costco and Wal-Mart has been tough on the sector, leading to decreased sales. In addition, office suppliers were slow to bounce back from the recession, as consumers and small businesses alike cut back on ordering office products.
Over the years, the companies have closed stores, slashed costs, and streamlined operations to offset stagnant sales. But the industry was still seen as being too bulky, and for years, rumors about possible consolidation have swirled around the sector, which is worth about $21.2 billion, according to research firm IBISWorld Inc. Of that, Staples holds a 35 percent market share, Office Depot has 26.1, and Office Max has 15.6.