Tempur Sealy International has expressed its commitment to proceeding with the $4 billion acquisition of Mattress Firm, despite the Federal Trade Commission (FTC) announcing its decision to block the deal. The company believes that a successful litigation process can be completed in the next few months, leading to the transaction’s closure in late 2024 or early 2025.
Although disappointed by the FTC’s 5-0 decision, Tempur Sealy stated that it had been working constructively with the commission to obtain approval for the acquisition. While acknowledging the FTC’s efforts to understand the industry and transaction, the company disagrees with the commission’s perspective on the matter.
Tempur Sealy highlights the highly competitive nature of the bedding industry, emphasizing the diverse array of products, brands, price points, and purchasing channels available to consumers. It asserts that Mattress Firm operates only a fraction of the thousands of brick-and-mortar storefronts across the United States where bedding products can be purchased. Additionally, there are numerous brick-and-mortar retailers and direct-to-consumer bedding brands that sell millions of products online annually.
The company firmly believes that the combination of Tempur Sealy and Mattress Firm will bring additional benefits to all stakeholders, especially consumers. It emphasizes the complementarity between Mattress Firm’s retail presence and Tempur Sealy’s manufacturing capabilities, which will facilitate targeted innovation, enhance the customer experience, and expand the U.S. omni-channel platform.
Furthermore, Tempur Sealy expects to leverage its global scale and vertically integrated infrastructure to unlock synergies and drive efficiencies in logistics, product lifecycle management, manufacturing optimization, and sourcing initiatives.
Tempur Sealy dispels concerns regarding potential negative impacts on the domestic workforce, stressing that all mattresses sold domestically are manufactured in the United States, providing thousands of jobs. The company has engaged in discussions with labor unions representing its employees, receiving letters of support from most unions.
Tempur Sealy asserts its openness to addressing FTC concerns through appropriate commitments. It plans to maintain Mattress Firm as a multi-branded retailer, has already initiated negotiations with several Mattress Firm suppliers for post-merger supply agreements, and offers a guaranteed slot commitment for third-party manufacturers at Mattress Firm stores. Additionally, the company is open to divesting stores and supporting infrastructure if necessary.
With confidence in the procompetitive rationale of the acquisition, Tempur Sealy looks forward to presenting the numerous benefits of the combination during the litigation process. The company intends to conduct a public conference call following the release of the FTC’s complaint.
In summary, Tempur Sealy International remains resolute in its determination to complete the acquisition of Mattress Firm, despite the opposition from the FTC. The company stands by the potential benefits the combination will bring to all stakeholders and believes that a successful litigation process will allow for the transaction’s completion in the near future.
FAQ Section:
Q: What is the status of Tempur Sealy’s acquisition of Mattress Firm?
A: Tempur Sealy is committed to proceeding with the $4 billion acquisition of Mattress Firm, despite the decision by the Federal Trade Commission (FTC) to block the deal.
Q: When does Tempur Sealy expect the transaction to be completed?
A: Tempur Sealy believes that a successful litigation process can be completed in the next few months, leading to the closure of the transaction in late 2024 or early 2025.
Q: How did Tempur Sealy respond to the FTC’s decision?
A: Tempur Sealy stated that it had been working constructively with the commission to obtain approval and expressed disappointment with the FTC’s decision. The company disagrees with the commission’s perspective on the matter.
Q: What are the potential benefits of the combination between Tempur Sealy and Mattress Firm?
A: Tempur Sealy believes that the combination will bring additional benefits, especially for consumers. It highlights the complementarity between Mattress Firm’s retail presence and Tempur Sealy’s manufacturing capabilities, which will enhance innovation and the customer experience.
Q: How does Tempur Sealy plan to address concerns raised by the FTC?
A: Tempur Sealy is open to addressing FTC concerns through appropriate commitments. It plans to maintain Mattress Firm as a multi-branded retailer, has initiated negotiations with Mattress Firm suppliers for post-merger supply agreements, and offers a guaranteed slot commitment for third-party manufacturers at Mattress Firm stores. The company is also open to divesting stores and supporting infrastructure if necessary.
Definitions:
– Federal Trade Commission (FTC): The Federal Trade Commission is an independent agency of the United States government responsible for promoting consumer protection and preventing anticompetitive business practices.
Related Links:
– Tempur Sealy International website
– Federal Trade Commission website