Tempur Sealy’s Mattress Firm acquisition faces a serious hurdle on the U.S. Federal Trade Commission, where all five commissioners voted to dam the deal. The unanimous decision means the FTC will challenge the $4 billion mattress industry merger in court.
On June 2, following the FTC’s announcement, Tempur Sealy responded in a public statement. It objected to the choice because it prepares for the federal government’s lawsuit to proceed within the U.S. District Court for the Southern District of Texas.
Tempur Sealy ecommerce sales by yr
Tempur Sealy is No. 156 in Digital Commerce 360’s Top 1000. The database features a rating of North America’s leading retailers by online sales. Mattress Firm is No. 274. Digital Commerce 360 sorts each firms within the Housewares & Home Furnishings category. Moreover, Digital Commerce 360 projects total ecommerce sales for Tempur Sealy in 2024 will likely be $5.52 billion.
Why the FTC is difficult Tempur Sealy’s Mattress Firm acquisition
“Through emails, presentations, and other deal documents, Tempur Sealy has made it abundantly clear that its acquisition of Mattress Firm is meant to kneecap competitors and dominate the market,” said Henry Liu, director of the FTC’s Bureau of Competition, within the FTC’s announcement. “This deal isn’t about creating efficiencies; it’s about crippling the competition, which might raise prices on a necessary good and could lead on to layoffs for good paying American manufacturing jobs in nearly a dozen states.”
Within the FTC’s official grievance, regulators called Mattress Firm “the only most significant retail channel for mattress brands.” In addition they claimed that it “can drive massive volumes of sales through its unmatched consumer reach. They added that “mattress brands jostle to access its floor space.” In that context, the commissioners consider that permitting Tempur Sealy to merge with Mattress Firm “would upend this competitive dynamic, giving Tempur Sealy enormous sway over the fate of its rivals.”
Furthermore, the filing also cites “Tempur Sealy’s history of using exclusionary deals to dam rivals.” As well as, the FTC asserted that “this acquisition would further cement its dominance and deprive independent brands of the chance to have interaction in free and fair competition.”
“Because this proposed acquisition may substantially lessen competition or are likely to create a monopoly, it ought to be enjoined,” the grievance states.
Tempur Sealy’s defense of the merger
In defense of its proposed deal, Tempur Sealy disputed the FTC’s assessment.
“Tempur Sealy has been working constructively with the FTC to secure regulatory approval for this transaction and is disillusioned that the FTC has initiated litigation,” a press release from the corporate read. “We appreciate their efforts to grasp the industry and the proposed transaction, but ultimately consider the FTC’s perspective doesn’t reflect all of the relevant facts and law.”
Offering its own view of the bedding industry, it painted a really different picture of the merger’s implications.
“The bedding industry is very competitive, offering consumers a various number of products, brands, price points, and buying channels,” Tempur Sealy stated. “There are millions of brick-and-mortar storefronts across america where consumers should buy bedding products, only a small fraction of that are operated by Mattress Firm. Moreover, brick-and-mortar retailers and direct-to-consumer bedding brands sell tens of millions of bedding products online annually.”
Ultimately the mattress brand stands by its intention to finish the deal. It concluded by expressing that confidence to shareholders in its release.
“We consider that a successful litigation process might be accomplished in the approaching months, which might allow us to shut the transaction in late 2024 or early 2025,” Tempur Sealy said.
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