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. 
| Index | Last | Change | % Change |
|---|---|---|---|
| Dow | 15,335.28 | -19.12 | -0.12% |
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| S&P 500 | 1,666.29 | -1.18 | -0.07% |
| Treasuries | 1.96 | 0.02 | 0.82% |
| Company | Price | Change | % Change |
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| Cisco Systems Inc | 23.94 | -0.30 | -1.22% |
| Microsoft Corp | 35.08 | 0.21 | 0.60% |
| Sprint Nextel Corp | 7.29 | -0.03 | -0.41% |
| Advanced Micro Devic... | 4.10 | 0.03 | 0.74% |
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| 15 yr fixed | 2.80% | 2.76% | |
| 5/1 ARM | 2.60% | 2.58% | |
| 30 yr refi | 3.65% | 3.61% | |
| 15 yr refi | 2.80% | 2.76% |
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