In a statement released this week, the Federal Trade Commission said it unanimously voted to challenge the merger between Tempur Sealy International, Inc., and Mattress Firm Group Inc.
In it’s 5-0 decision, the FTC alleged that the proposed $4 billion acquisition would give TSI, the world’s largest mattress supplier and manufacturer, the “ability and incentive” to suppress competition after merging with the largest national mattress retailer.
“Through emails, presentations, and other deal documents, Tempur Sealy has made it abundantly clear that its acquisition of Mattress Firm is intended to kneecap competitors and dominate the market,” Henry Liu, Director of the FTC’s Bureau of Competition, said in the statement. “This deal isn’t about creating efficiencies; it’s about crippling the competition, which would raise prices on an essential good and could lead to layoffs for good paying American manufacturing jobs in nearly a dozen states.”
The FTC noted that the filing of its administrative complaint marks the beginning of a proceeding, through which the raised allegations will be tried in a formal hearing before an administrative law judge.
In response to the FTC’s filing, TSI issued a statement expressing its disappointment in the FTC’s decision, saying they’ve been working with the agency to secure regulatory approval for the merger.
“We are and have been open to appropriate commitments to address FTC concerns,” the TSI statement reads. “Consistent with our operation of the multiple bedding retailers we have acquired in Europe, Mattress Firm will remain a multi-branded retailer… We are confident in the procompetitive rationale for this transaction and look forward to presenting the many benefits of the combination. We believe that a successful litigation process can be completed in the coming months, which would allow us to close the transaction in late 2024 or early 2025.”
Last August, when the merger was first announced, TSI President of U.S. Sales Steve Rusing sat down with Nationwide Marketing Group CEO to address a number of Member-submitted questions about the merger and its potential impact on the independent retail channel.
“We have a vested interest in NMG and we have a vested interest in the Independent channel,” Rusing said during the interview, pointing out that Nationwide Members, collectively, have become TSI’s second largest customer. “It’s been good business for us, it’s healthy, and we remain committed to it prior to this acquisition and after the acquisition. … It’s too big of a business for us not to be. There’s no change in our commitment [to the Independent channel] and, in fact, I would tell you that we’re probably going to have to work harder.”
