OfficeMax (OMX, Fortune 500) shares rallied 30%, while shares of Office Depot (ODP, Fortune 500), the larger of the two, surged 24%.
Office Depot has 1,262 stores worldwide, 39,000 employees, and 2011 sales of $11.5 billion, the last full year for which it has reported results.
Office Max has 978 stores, 29,000 employees and 2011 sales of $7.1 billion.
The talks come as mergers and acquisitions have picked up.
Just last week, US Airways (LCC, Fortune 500) announced a merger with American Airlines parent AMR (AAMRQ, Fortune 500), Warren Buffett's Berkshire Hathaway (BRKA, Fortune 500) announced it was buying Heinz (HNZ, Fortune 500), and Comcas (CMCSA)t announced a $16.7 billion deal for the 49% of NBC Universal that was still owned by General Electri (GE, Fortune 500)c.
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Both Office Depot and OfficeMax are dwarfed by Staples (SPLS, Fortune 500), which operates 2,248 stores worldwide and had 2011 sales of $25 billion. Staples has also face increased competition from online retailers, such as Amazon (AMZN, Fortune 500). Staples shares were also up nearly 14% in early trading.
The merger talks were widely reported Monday, when U.S. markets were closed for a holiday. 
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| Index | Last | Change | % Change |
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| Dow | 15,173.90 | -144.33 | -0.94% |
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| Treasuries | 2.29 | 0.11 | 5.13% |
| Company | Price | Change | % Change |
|---|---|---|---|
| Sprint Nextel Corp | 7.06 | -0.26 | -3.55% |
| Pfizer Inc | 29.40 | -0.00 | -0.02% |
| Bank of America Corp... | 13.37 | 0.10 | 0.75% |
| Micron Technology In... | 13.82 | 0.07 | 0.55% |
| General Electric Co | 24.24 | -0.09 | -0.37% |
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| 30 yr refi | 4.00% | 4.03% | |
| 15 yr refi | 3.11% | 3.16% |
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