FTC Blocks Tempur Sealy's Acquisition of Mattress Firm Over Competition Concerns

By Madz Dizon

Jul 02 2024, 18:19 PM EDT

FTC Blocks Tempur Sealy's Acquisition of Mattress Firm Over Competition Concerns — he seal of the Federal Trade Commission(FTC) is seen on the lecturn in the Commissioner's Conference Room January 15, 2014 inside the FTC headquarters in Washington, DC . PAUL J. RICHARDS/AFP via Getty Images

In a unanimous decision on Tuesday, July 2, the Federal Trade Commission (FTC) voted to reject the $4 billion acquisition deal between mattress supplier Tempur Sealy International and retailer Mattress Firm. The concern behind this decision is that the merger would stifle competition and result in skyrocketing prices.

Tempur Sealy is the leading global provider of mattresses, encompassing well-known brands such as Tempur-Pedic, Stearns & Foster, and Sealy.

FTC Unanimously Rejects Tempur Sealy's Mattress Firm Acquisition

In May 2023, it initially agreed to purchase Mattress Firm, the largest bedding retailer in the nation. However, the FTC has given the green light for a lawsuit to be filed in federal court in order to prevent the merger, CNN reported.

The Commission expressed concerns about the potential impact of the proposed deal on competition and pricing for mattress buyers, highlighting the significant influence it would grant the companies in the mattress supply chain.

According to the FTC, it was revealed in documents that other mattress suppliers would no longer have access to a crucial retail channel. These suppliers have a significant number of American workers in their employment.

According to Henry Liu, Director of the FTC's Bureau of Competition, Tempur Sealy's acquisition of Mattress Firm is being portrayed as a strategic move to weaken competitors and establish dominance in the market.

The proposed agreement would have resulted in the combined company having a total of 3,000 stores and 71 manufacturing facilities. It was anticipated that the deal would be finalized in the latter half of 2024.

Tempur Sealy boasts an impressive portfolio that includes renowned brands such as Tempur-Pedic, Sealy, and Stearns and Foster.

Mattress Firm Defends Tempur Sealy Deal

The FTC claims that the limited competition in the high-end mattress industry could negatively impact a significant group of mattress purchasers, specifically "working class, older adults" who frequently depend on financing options.

The FTC has issued a warning, stating that the purchase has the potential to force competitors like Serta Simmons Bedding and Purple Innovation, Inc. out of business.

Tempur Sealy stated that the bedding industry is fiercely competitive, with only a small number of physical stores being Mattress Firms. The company anticipates that the litigation process will be concluded within the coming months, and remains confident in its timeline to finalize the transaction by late 2024 or early 2025.

Mattress Firm expressed its disappointment in a statement, emphasizing its belief that the transaction with Tempur Sealy will bring benefits to consumers, employees, and the bedding and furniture industry as a whole.