FTC sues to block Tempur Sealy’s $4B purchase of Mattress Firm (NYSE:TPX)

Update 1:20pm: Updated posts, added Tempur Sealy’s response.

The Federal Trade Commission has filed a lawsuit to block mattress manufacturer Tempur Sealy (New York:TPX) planned to buy retailer Mattress Firm for $4 billion. Up 2.4%

The regulatory authority issued an administrative complaint and issued a permit to file a lawsuit. In federal court to block the deal, Tempur Sealy — the world’s largest mattress supplier and manufacturer — alleged that it had the ability and incentive to “suppress competition” and raise mattress prices for millions of consumers once it acquired Mattress Firm, according to statement From the Federal Trade Commission on Tuesday.

The committee voted 5-0 to allow a lawsuit to challenge the deal.

“Through emails, presentations, and other transaction documents, Tempur Sealy made clear that its acquisition of Mattress Firm was intended to force competitors to dominate the market,” Henry Liu, director of the FTC’s Bureau of Competition, said in the statement. “This deal is not intended to create efficiencies; it is intended to cripple competition, which will raise prices on a critical commodity and potentially lead to layoffs from good-paying American manufacturing jobs in nearly a dozen states.”

Tempur-Sely (TPX) responded to the FTC’s lawsuit in a statement Tuesday, saying it believes “the FTC’s view does not reflect all relevant facts and laws.”

“We are confident in the competitive basis of this transaction and look forward to delivering the many benefits of the combination,” Tempur-Sealy said in a statement. “We believe that a successful litigation process can be completed in the coming months, allowing 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 reported late Monday that the Federal Trade Commission is preparing to file a lawsuit over the mattress deal. CTFN reported Tuesday that the companies met with the FTC last week in a last-ditch effort to persuade the regulator not to block the merger.