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Update 1:20pm: Updates shares, adds Tempur Sealy response.
The Federal Trade Commission sued to block mattress maker Tempur Sealy’s (NYSE:TPX) planned $4 billion purchase of retailer Mattress Firm. Tempur Sealy rose 2.4%
The regulator issued an administrative complaint and authorized a lawsuit in federal court to prevent the deal, alleging that Tempur Sealy — the world’s largest mattress supplier and manufacture – will have the ability and incentive to “suppress competition” and raise prices for mattresses for millions of consumers once it acquires Mattress Firm, according to a statement from the FTC on Tuesday.
The Commission voted 5-0 to authorize the lawsuit to challenge the transaction.
“Through emails, presentations, and other deal documents, Tempur Sealy has made it abundantly clear that its acquisition of Mattress Firm is intended to kneecap competitors and dominate the market,” said Henry Liu, Director of the FTC’s Bureau of Competition said in the statement “This deal isn’t about creating efficiencies; it’s about crippling the competition, which would raise prices on an essential good and could lead to layoffs for good paying American manufacturing jobs in nearly a dozen states.”
Tempur Sealy (TPX) responded to the FTC suit in a statement on Tuesday and said that it believes that the “FTC’s perspective does not reflect all the relevant facts and law.”
“We are confident in the procompetitive rationale for this transaction and look forward to presenting the many benefits of the combination,” Tempur Sealy said in the statement. “We believe that a successful litigation process can be completed in the coming months, which would allow us to close the transaction in late 2024 or early 2025.”
Tempur Sealy (TPX) agreed to buy Mattress Firm in a $4 billion deal in May 2023.
Politico Pro late Monday reported that the FTC was preparing a lawsuit over the mattress deal. CTFN reported last Tuesday that the companies met with the FTC last week in a last effort to try to convince the regulator to not block the combination.