By Zaeem Shoaib


The U.S. Federal Trade Commission has voted unanimously to block Tempur Sealy's proposed $4 billion acquisition of Mattress Firm due to competition and pricing concerns.

On Tuesday, the FTC said it issued an administrative complaint and authorized a lawsuit in federal court to block the deal. It also authorized staff to seek a temporary restraining order and seek a preliminary injunction.

The regulator alleges the acquisition of Mattress Firm would give the world's largest mattress supplier and manufacturer the ability and incentive to suppress competition and raise prices for mattresses for millions of consumers.

"The proposed vertical acquisition would merge Tempur Sealy's manufacturing and supply operations with Mattress Firm's vast retail footprint, giving the combined company enormous power at multiple parts of the mattress supply chain," the FTC said.

The regulator said multiple deal documents show that Tempur Sealy plans to limit competitors' access to the network of stores owned by Mattress Firm, which is the largest mattress retailer in the U.S., hampering rivals' ability compete and potentially leading competing suppliers to reduce output, close factories, and lay off workers.

"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," said Henry Liu, Director of the FTC's Bureau of Competition.

The federal court complaint and request for preliminary relief will be filed in the U.S. District Court for the Southern District of Texas to halt the deal.

Tempur Sealy had previously stated in May that it expected to close the deal in mid to late 2024 after the FTC completed its review.

Tempur Sealy CEO Scott Thompson had said on an investor call that the company would likely look at share repurchases if the deal doesn't go through.


Write to Zaeem Shoaib at zaeem.shoaib@wsj.com


(END) Dow Jones Newswires

07-02-24 1239ET