US to block Tempur Sealy's $4 billion Mattress Firm deal (updated)

Purple Innovation

02/07/2024 17:33

(Adds byline, new headline, context on the deal in paragraphs
3-6)
    By Jody Godoy
       July 2 (Reuters) - The U.S. Federal Trade Commission
said on Tuesday it will sue to block the $4 billion merger
between mattress manufacturer Tempur Sealy International Inc
 TPX.N  and retailer Mattress Firm.
    Tempur Sealy had announced the cash-and-stock deal in May
2023, seeking to add Mattress Firm's more than 2,300
brick-and-mortar store locations. The combined company would
have about 3,000 stores globally.
    The FTC voted 5-0 to block the deal, voicing concern about
the effects on competition with rivals Serta Simmons Bedding
 SRTA.PK  and Purple Innovation Inc  PRPL.O .
    "By cutting off or degrading rivals' access to Mattress Firm
as a retail channel, Tempur Sealy’s acquisition could result in
higher mattress prices, decreased product quality and choice, or
reduced innovation," the FTC said in a statement.
        Spokespersons for Tempur Sealy and Mattress Firm did not
immediately respond to requests for comment on the FTC's
announcement.
  
        Tempur Sealy has said it expected to complete the
purchase of Mattress Firm in the second half of 2024. 
  
        To address potential regulatory concerns, Tempur Sealy
has said it could divest some stores, and in May said it signed
agreements with six other mattress makers for Mattress Firm
stores to continue carrying their brands.    
  

 (Reporting by Jody Godoy; Editing by Chizu Nomiyama)
 ((Jody.Godoy@thomsonreuters.com;))