The US Federal Trade Commission (FTC) has unanimously voted to block the proposed $4bn acquisition of Mattress Firm by Tempur Sealy.
The two companies entered an agreement to the deal in May 2023.
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However, the commission launched an administrative complaint and authorised a lawsuit, alleging that the deal could suppress competition and raise prices for mattresses.
The proposed vertical acquisition would combine Tempur Sealy’s supply operations with Mattress Firm’s extensive retail footprint.
This would grant the combined entity considerable power over segments of the mattress supply chain.
Internal documents indicate Tempur Sealy’s intention to restrict competitors’ access to Mattress Firm’s nationwide store network, which could harm competition.
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By GlobalDataThis could lead to reduced competition, factory closures and job losses among American mattress manufacturers.
FTC Bureau of Competition director Henry Liu said: “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.
“This deal isn’t about creating efficiencies – it’s about crippling the competition, which would raise prices on an essential good and could lead to layoffs for good-paying American manufacturing jobs in nearly a dozen states.”
Mattress Firm, which is one of the largest mattress retailers in the nation, plays a crucial role in the retail mattress market.
The acquisition would give Tempur Sealy significant leverage over competitors such as Serta Simmons Bedding and Purple Innovation.
The FTC’s complaint further alleges that the acquisition would negatively impact the premium mattress market, leading to higher prices, diminished product quality and choice, and stifled innovation.
The merger could result in Tempur Sealy foreclosing rivals by cutting off or limiting their access to a key retail channel.
