By Jody Godoy
(Reuters) -The U.S. Federal Trade Commission mentioned on Tuesday it should sue to block the $4 billion merger between mattress producer Tempur Sealy (NYSE:) International Inc and retailer Mattress Firm. Tempur Sealy had introduced the cash-and-stock deal in May 2023, in search of to add Mattress Firm’s greater than 2,300 brick-and-mortar retailer areas. The mixed firm would have about 3,000 shops globally.
The FTC voted 5-0 to block the deal, voicing concern concerning the results on competitors with rivals together with Serta Simmons Bedding and Purple Innovation (NASDAQ:) Inc that would lead to larger costs for shoppers and potential job losses for manufacturing staff.
“This deal isn’t about creating efficiencies; it’s about crippling the competition,” mentioned Henry Liu, head of the FTC’s Bureau of Competition.
Tempur Sealy mentioned in an announcement that it was upset with the regulator’s choice and that the shops it could purchase are a small fraction of bedding retail areas within the U.S.
The bedding maker additionally mentioned it had engaged with the unions that symbolize its staff 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 to statistics compiled by the International Sleep Products Association.
Tempur Sealy had anticipated to full 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 tackle potential regulatory considerations, Tempur Sealy has mentioned it might divest some shops, and in May mentioned it signed agreements with six different mattress makers for Mattress Firm shops to proceed carrying their manufacturers.
The merger settlement features a $50 million break-up charge for FTC points and a most retailer divestiture restrict, Tempur Sealy CEO Scott Thompson mentioned final 12 months.