Trial opens in Justice Department bid to force Assa Abloy to scrap deal
24/04/2023 18:58
WASHINGTON, April 24 (Reuters) - Lawyers for the U.S.
Justice Department and Assa Abloy ASSAb.ST , the world's
biggest lockmaker, began arguments Monday in a fight over
whether the Swedish company can go forward with a $4.3-billion
deal to buy a division of Wisconsin-based Spectrum Brands
Holdings Inc SPB.N that makes residential door locks.
Speaking for the government, Matthew Huppert said that Assa
Abloy's plans to resolve antitrust concerns by selling some
assets, including its Yale smart lock U.S. business, was
"insufficient" and "cobbled together to rescue an illegal
merger." The government has asked the judge to stop the deal.
Speaking for Assa Abloy, Justin Bernick said that Fortune
Brands, which is purchasing the Emtek and Yale businesses, is a
strong buyer that will have the patents, software, access to
supply chains, staff and other assets needed to compete,
ensuring that consumers would not be hurt by the transaction. It
had announced in December that it would sell the assets for $800
million.
Bernick also argued that internet sales meant that a lot of
small competitors had entered the market, also reducing the
possibility that consumers would be hurt by the merger.
The lawsuit to stop the deal, which was filed in September,
is one of a several high-profile fights that the government has
undertaken to stop transactions that the Biden administration
believes would hurt consumers. All but one has ended in defeat
for the Justice Department.
Judge Ana Reyes, who is hearing the case, is expected to
make a decision on or before June 20.
The government has said that the deal would give Assa Abloy
a near-monopoly in top-line mechanical door hardware and more
than half of the fast-growing market for smart locks, devices
that allow homeowners to enter their homes
electronically. urn:newsml:reuters.com:*:nL1N30M1J7
The company, whose products range from security doors and
automated entrance solutions to electronic and mechanical locks,
has in recent quarters cut costs as slowing demand, supply
chain problems and semiconductor shortages have hampered its
business.
Assa Abloy makes Yale, August and Emtek brands, while
Spectrum's division makes the Baldwin and Kwikset brands. Assa's
rivals include Allegion ALLE.N and Stanley Black & Decker
SWK.N .
(Reporting by Diane Bartz; Editing by Aurora Ellis)
((Diane.Bartz@thomsonreuters.com; 1 202 898 8313;))