Office Depot, the largest office supplies retailer, has agreed to sell its desk supply business to General Electric (GE) for $25 million.
The deal is expected to close in the second half of the year.
Office Depot’s revenue fell 13 percent in the third quarter, with the company reporting an operating loss of $5.1 billion.
GE is the second-largest office supplies manufacturer, behind Staples.
The merger, if approved by shareholders, would make Office Depot the largest U.S. office supply company by sales, but it would also have the largest number of stores.
It is a rare merger that would result in a direct merger.
The stock is up about 20 percent in 2017.
“The merger represents the best opportunity for us to grow our business, while also reducing the risk of disruption and our competitors taking advantage of our market position,” said CEO Mark Zaid in a statement.
The Office Depot deal is part of a $300 billion deal that also includes a deal to buy JetBlue Airways.
The two companies have a long history and close business relationships, with GE having owned the JetBlue brand since 2004.
GE also has a $1.3 billion investment in JetBlue and a $7.7 billion agreement to buy the airline.