Designer and retailer of bedding products Tempur Sealy has announced plans to sell more than 100 stores to facilitate regulatory approval for its proposed acquisition of Mattress Firm.
In May 2024, Tempur Sealy agreed to acquire US retailer Mattress Firm in a deal worth $4bn.
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The divesture aims to address concerns raised by the US Federal Trade Commission, which moved to block the merger in July over potential price increases and job cuts.
Tempur Sealy has already signed an agreement to sell 73 Mattress Firm locations to a multi-branded retailer Mattress Warehouse.
The company will also divest 103 mattress locations under its Sleep Outfitters brand, and seven distribution centres, but will continue to provide its products to the divested stores.
The sale is contingent upon the completion of the Mattress Firm acquisition and is expected to close one financial quarter later.
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By GlobalDataThe litigation process with the FTC will commence on 12 November 2024 and will go on for two weeks.
Tempur Sealy expects the transaction with Mattress Firm to be completed by late 2024 or early 2025.
Tempur Sealy chairman and CEO Scott Thompson stated: “As part of our engagement with the FTC on the proposed acquisition of Mattress Firm, we conducted a divestiture process, which led to an agreement with Mattress Warehouse, a company with extensive mattress retail experience, a strong capital base, and a capable leadership team.”
Following the completion of both the Mattress Firm deal and the divestiture, Tempur Sealy anticipates operating more than 2,800 retail locations globally.
The company also expects that half of its North American sales will be attributed to Mattress Firm operations.
Tempur Sealy continues to project annual run-rate synergies of $100m by the end of the fourth year post-closure.
In a separate statement, the retailer entered into a Term Loan B agreement for $1.6bn to help fund its cash-and-stock deal.
