By Jody Godoy
(Reuters) -The U.S. Federal Commerce Fee stated on Tuesday it should sue to dam the $4 billion merger between mattress producer Tempur Sealy (NYSE:) Worldwide Inc and retailer Mattress Agency. Tempur Sealy had introduced the cash-and-stock deal in Might 2023, looking for so as to add Mattress Agency’s greater than 2,300 brick-and-mortar retailer places. The mixed firm would have about 3,000 shops globally.
The FTC voted 5-0 to dam the deal, voicing concern concerning the results on competitors with rivals together with Serta Simmons Bedding and Purple Innovation (NASDAQ:) Inc that might result in larger costs for shoppers and potential job losses for manufacturing employees.
“This deal isn’t about creating efficiencies; it’s about crippling the competitors,” stated Henry Liu, head of the FTC’s Bureau of Competitors.
Tempur Sealy stated in an announcement that it was dissatisfied with the regulator’s determination and that the shops it might purchase are a small fraction of bedding retail places within the U.S.
The bedding maker additionally stated it had engaged with the unions that characterize its workers and that none had opposed the deal.
The overwhelming majority of mattresses bought within the U.S. are made domestically, with round $7.8 billion in gross sales final 12 months, in contrast with round $809 million in imports, in accordance with statistics compiled by the Worldwide Sleep Merchandise Affiliation.
Tempur Sealy had anticipated to finish the deal this 12 months. It now envisions resolving the litigation within the coming months and shutting late this 12 months or in early 2025.
To handle potential regulatory considerations, Tempur Sealy has stated it might divest some shops, and in Might stated it signed agreements with six different mattress makers for Mattress Agency shops to proceed carrying their manufacturers.
The merger settlement features a $50 million break-up payment for FTC points and a most retailer divestiture restrict, Tempur Sealy CEO Scott Thompson stated final 12 months.
