The Mexican company that operates office supply stores, Grupo Gigante SAB, has agreed to purchase half of the venture of Office Depot Inc in the country worth 8.78 billion pesos or US$690 million in cash.

The Mexican firm and its affiliates would own Office Depot de Mexico once the deal is completed. This was confirmed by Office Depot from its office in Boca Raton, Florida through a statement. The said acquisition would require shareholder approval as well as Mexican regulatory approval.

The joint venture deal would allow Gigante to develop as well as operate Office Depot stores throughout Latin America. The only areas not covered under the deal is the Caribbean. The information was obtained from regulatory documents filed by the Mexican office supplies firm. Further rights included in the deal, as reported in the documents, allowed for the use of the Office Depot brand for the next fifteen years in the Latin American region. This privilege would be automatically renewed with no additional fees paid, according to Gigante.

Office Depot is the second biggest US office supply chain and is intent on divesting its shares in the more than 248 stores currently in operation in Mexico and throughout Central America. This is part of the merger deal with OfficeMax Inc. The sale is expected to generate US$550 million after taxes which according to Office Depot would be utilized to pay off outstanding debt and redeem preferred shares.