FTC, Tempur Sealy ready for legal fight over $4B Mattress Firm acquisition

LEXINGTON, Ky. – It has been a week since the Federal Trade Commission sued in federal court to block Tempur Sealy International’s proposed $4 billion acquisition of Houston-based Mattress Firm, and the legal process is continuing.

The FTC has said the deal would contract the industry, lessen competition and ultimately result in higher mattress prices for consumers. Tempur Sealy fired back saying the agency didn’t take into account the competitive mattress landscape including of e-commerce mattress sales. Both the agency and the company are prepared to litigate the matter, and both have expressed their confidence in their stance.

The deal, which has had the mattress industry talking since before it was officially announced in May 2023, has the potential to change the landscape of the bedding business.

The FTC announced its 5-0 vote to oppose the deal early last week following a closed-door meeting. The FTC said in its announcement that deal documents painted a picture of Tempur Sealy’s plan to “kneecap competitors and dominate the market” with its acquisition of Mattress Firm.

Since then, a number of developments have occurred. Here’s the rundown:

Tempur Sealy, the industry’s largest mattress maker responded with a lengthy statement, saying the FTC was wrong in its assessment of the proposed deal. The company also said it was prepared to defend the acquisition in court, something the company has said consistently since announcing the planned acquisition.

Mattress Firm, the business’ largest specialty sleep retailer with more than 2,300 stores, weighed in voicing its “disappointment” in the FTC vote, echoing Tempur Sealy’s confidence that the deal would ultimately be consummated.

Late in the day following its announcement July 2, the FTC filed its case in the U.S. District Court for the Southern District of Texas.  ‎The complaint, while heavily redacted, outlined Tempur Sealy’s plan to harm “rival” mattress makers.

For its part, the FTC began contacting third-party participants – those companies and individuals within the industry – that had shared information with the agency during its lengthy investigation into the deal and what it could mean for the industry.  ‎The commission has requested that the information shared by those entities fall under the agency’s “standard protective order” restricting who can have access to the information and the information can be handled.

Earlier this week, Tempur Sealy hosted a conference call that ran almost 13 minutes reiterating its confidence in the deal, and pointed out that the company had worked “constructively” with the FTC given the agency six time extensions to complete its review of the deal. Scott Thompson, Tempur Sealy’s chairman, president and chief executive officer, outlined point-by-point the company’s belief that the deal was in line with regulations and also said the company would argue its case in court and not via public comments.

Looking ahead, no court date has been set, and other than motions for attorney’s to be part of the case and a  joint motion request for keeping confidential information under wraps, no other documents have been filed or signed by the court.

See also:

  • Tempur Sealy sees these 6 benefits to $4 billion Mattress Firm deal
  • Tempur Sealy continues to ink supplier agreements, moving toward acquisition’s close
  • Why it took 7 years for Tempur Sealy and Mattress Firm to reach an agreement
  • Tempur Sealy to divest 200 retail stores ahead of $4B Mattress Firm deal

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