Staples and Office Depot are no longer working towards a $6.3 billion merger. A trading halt was triggered for both companies’ stocks on Tuesday morning.
The announcement was made after a federal judge granted a preliminary injunction Tuesday that had been requested by the Federal Trade Commission, which opposed Staples’ plan to acquire Office Depot.
The companies “plan to terminate their merger agreement,” Staples said in a statement.
This past December the FTC argued that Staples and Office Depot would combine to create a single company with too much control over the office supply retail market.
“We are extremely disappointed that the FTC’s request for preliminary injunction was granted despite the fact that it failed to define the relevant market correctly, and fell woefully short of proving its case,” Staples CEO Ron Sargent said in a statement.
The FTC blocked a merger between the two companies in 1997.
The companies were arguing this time around that Amazon, Wal-Mart, and other non-traditional office supply companies were not digging into their market share.
Profits have indeed slowed at both companies in recent years. In 2015, Staples announced plans to shut down 225 stores in North America.
Staples and Office Depot argued that the merger would save the companies a combined $1 billion annually.