NEW YORK CITY-Office supply giants OfficeMax and Office Depot are in advanced discussions to merge the two companies.

The merger deal is said to be a stock-for-stock transaction, reports the Wall Street Journal.

Office Depot, based in Boca Raton, FL, and OfficeMax, which is headquartered in Naperville, IL, have each suffered from falling sales due to the struggling economy and increased online competition.

Office Depot’s market value is just $1.3 billion, while OfficeMax’s market value is about $933 million. Spokesmen for both firms say the companies do not comment on speculation or rumor.

Office Depot operates 1,675 stores and boasts annual sales of approximately $11.5 billion. OfficeMax has approximately 900 stores and posts about $7 billion in annual sales. See story in the Wall Street Journal.