FTC Seeks to Block $4 Billion Mattress Retailer Acquisition: Bipartisan Support and Legal Battle Ensues

FTC Seeks to Block $4 Billion Mattress Retailer Acquisition

In a surprising move, the U.S. Federal Trade Commission (FTC) voted 5-0 on July 2, 2024, to block a $4 billion acquisition of a mattress retailer by a major mattress manufacturer. The FTC filed both an administrative complaint and a complaint in the U.S. District Court for the Southern District of Texas, seeking to enjoin the transaction pending further investigation.

The proposed acquisition would combine the world’s largest mattress supplier with the nation’s largest mattress retailer, raising concerns about potential anti-competitive behavior. The FTC’s Director of the Bureau of Competition, Henry Liu, stated that the acquisition was intended to “kneecap competitors and dominate the market,” rather than create efficiencies.

The FTC’s administrative complaint alleges that the acquisition would substantially lessen competition in the market for premium mattresses nationwide, in violation of antitrust laws. The agency raised concerns about the Manufacturer’s history of using exclusionary deals to block rival suppliers and stated that the acquisition would further cement its dominance in the market.

The merging parties have defended their merger, stating that it would not diminish horizontal competition and that the vast majority of mattress manufacturers and retailers would not be affected. They also raised constitutional defenses, arguing that the FTC’s challenge violated their rights.

On July 16, the district court granted the FTC’s motion for a temporary restraining order, preventing the parties from closing the deal pending further proceedings. The outcome of this case could have significant implications for the mattress industry and competition in the market.

Overall, the FTC’s challenge to this acquisition has sparked bipartisan support and raised important questions about competition and consumer choice in the mattress industry. Stay tuned for updates on this developing story.