The Federal Trade Commission announced Tuesday that Tempur Sealy has challenged its proposed $4 billion acquisition of Mattress Firm.
The FTC has voted unanimously to go to federal court to stop the nation's largest mattress manufacturer from buying from the largest bedding retailer, proverb The combined company would have “the ability and incentive to suppress competition and raise mattress prices for millions of consumers.”
Tempur Sealy has shown that it plans to limit competitors' access to Mattress Firm's nationwide network of stores, significantly hampering its ability to compete, the FTC said. The predominantly U.S. manufacturers employ thousands of workers and would likely have to close factories and lay off workers if the deal announced would continue, the FTC said.
“Tempur Sealy made it clear through emails, presentations and other deal documents that its acquisition of Mattress Firm was intended to undermine competitors and dominate the market,” Henry Liu, director of the FTC’s Bureau of Competition, said in a statement.
Tempur Sealy dismissed the FTC's concerns in a rack“We continue to believe that the combination of Tempur Sealy and Mattress Firm will deliver additional benefits to all stakeholders, especially consumers.”
Lexington, Kentucky-based Tempur Sealy expects the merger, announced in May 2023, to survive the FTC’s lawsuit, allowing the transaction to close late this year or early 2025.
Tempur Sealy bedding products are sold online in more than 700 company-owned stores worldwide, while Mattress Firm, owned by South African retailer Steinhoff International, operates more than 2,400 stores in 49 U.S. states.
“Mattress Firm is disappointed with the FTC’s decision and remains confident that the transaction with Tempur Sealy will be beneficial to consumers and employees, as well as to the bedding and furniture industry as a whole,” the company said in an emailed statement.
“We will continue to offer the carefully curated, comprehensive and diverse assortment that is a core element of our business, including both Tempur Sealy and non-Tempur Sealy branded products. In addition, Tempur Sealy has already made arrangements with many of our suppliers for post-merger supply,” Mattress Firm added.
The FTC's lawsuit would result in the antimonopoly agency issuing a vertical merger — deals involving companies that do not directly compete with each other but are active in the same supply chain.
