The Federal Trade Commission on Tuesday unanimously blocked mattress supplier Tempur Sealy International Inc.’s $4 billion acquisition of retailer Mattress Firm Inc., saying the merger could stifle competition and lead to higher prices.
Tempur Sealy owns Tempur-Pedic, Stearns & Foster and Sealy and is the world’s largest mattress supplier.
The company had originally agreed to acquire Mattress Firm, the country’s largest bedding retailer, in May 2023.
However, the FTC authorized a lawsuit in federal court to block the merger.
“Instead of improving efficiencies, this deal stifles competition, potentially raising the prices of essential goods and costing good-paying American manufacturing jobs in nearly a dozen states,” the FTC’s Director of Competition said. Henry Liu said in a statement..
The commission said the merger could “hamper” competitors by limiting Mattress Firm’s access to floor space and introducing unfair store incentives, such as higher employee commission rates on Tempur Sealy sales.
The FTC said the merger could lead to higher prices for mattress customers — who are often “working class and older adults with limited disposable income” — and could have adverse effects on workers, many of whom are employed by rival mattress suppliers that could be forced to close due to unfair competition.
Tempur Sealy The merger will only benefit consumers through improved “customer experience” and increased “efficiencies.”
The mattress supplier said it was confident that “the legal proceedings will be successfully concluded in the coming months” and that the acquisition would close in late 2024 or early 2025.
The merger was originally scheduled to close in late 2024.
The transaction provides Tempur Sealy and Mattress Firm with a strong manufacturing and retail footprint with approximately 3,000 stores and 71 manufacturing facilities. Furniture sales slow down This comes after furniture sales were strong during the pandemic.
Tempur Sealy could give Mattress Firm a cushion to weather past hard times: The mattress retailer filed for bankruptcy and announced plans to close up to 700 of its worst-performing stores in 2018.
This deal is not the first acquisition Mattress Firm has been involved in: In 2015, Mattress Firm acquired Sleeper’s for $780 million, a deal that added more than 1,000 stores to its portfolio.
Mattress makers and retailers, including bed-in-a-box mattress maker Casper and Amazon, have been hit hard by online competition in recent years.
With post wire
