Tempur Sealy’s acquisition of Mattress Firm may be summer’s hottest topic | Sheila Long O’Mara


This summer is proving to be extremely warm, and I’m not just talking about the weather.

The news cycle has been toasty for the bedding category, and there’s no hotter story right now than Tempur Sealy International’s quest to close its $4 billion acquisition of Houston-based Mattress Firm, and as of this writing, the summer just got a lot hotter.

The Federal Trade Commission ruled in a 5-0 decision to block the deal via a lawsuit, and Tempur Sealy has fired back saying it thinks the FTC’s perspective is off the mark.

So, just as we were nearing the end of the speculation and the ongoing chatter and will-they-or-won’t-they conversation about the deal more than 430 days after it was first announced, we’ve been thrown back into the fray. We’re back to what feels like interminable waiting for this to happen or not.

The FTC, in a closed-door hearing the first week of July, ruled unanimously that the deal, if allowed to close, would give Tempur Sealy an upper hand with an “ability and incentive to suppress competition” that could result in higher mattress prices.

The commission also dropped an accusatory nugget into its announcement that documents for the deal showed that Tempur Sealy planned to “limit rivals’ access to Mattress Firm’s nationwide network of stores.”

Tempur Sealy, in its reaction to the FTC’s statements, said the commission’s perspective does not reflect all relevant facts and law. The global mattress producer points out that mattresses are sold via brick-and-mortar stores, online and via direct-to-consumer brands, making it a “highly competitive” industry with a wealth of selection for consumers.

The company pointed to its stated strategy of keeping Mattress Firm as “a multi-branded retailer” and reiterated its signing of six “post-merger supply agreements” with other mattress brands that the 2,300-unit retailer sells online and in its stores. It also brought up Its willingness to divest of 200 or so Sleep Outfitters stores in December.

The final point in Tempur Sealy’s reaction comment was the repeated refrain that “a successful litigation process can be completed,” and the company will “close the transaction in late 2024 or early 2025.”

Tempur Sealy and Mattress Firm have had a lengthy dance with the commission.

While the proposed deal between the industry’s largest mattress maker and the industry’s largest retailer wasn’t announced until May 2023, the companies filed a pre-merger notification of the deal in October 2022, seven months before the official announcement.

That notification triggered an investigation, and FTC staffers began their research into the mattress business. That deep dive that included calls to industry mattress makers and retailers resulted in the FTC’s conclusion that the industry and the consumer could be harmed by the acquisition.

The legal wranglings will begin soon, and that will surely add hotter days ahead. Tempur Sealy has its war chest at the ready.

Hang on, folks; things are about to get a lot more interesting.

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