In a major decision, the Federal Trade Commission (FTC) voted unanimously to block mattress maker Tempur Sealy’s acquisition of Mattress Firm. This decision comes after Tempur Sealy, the world’s largest mattress supplier and manufacturer, agreed to buy the United States’ largest bedding retailer in a deal worth approximately $4 billion in May 2023.
The FTC authorized a lawsuit in federal court to block the acquisition, citing concerns about competition and potential price increases for mattress buyers. According to the Commission, the proposed deal would give the combined companies “enormous power” in the mattress supply chain and could lead to layoffs for American workers in various states.
FTC Director of the Bureau of Competition, Henry Liu, stated, “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.”
The deal, if approved, would have given the combined company 3,000 stores and 71 manufacturing facilities, with an expected closing date in the second half of 2024. Tempur Sealy’s portfolio includes Tempur-Pedic, Sealy, and Stearns and Foster.
Analysts had previously seen the deal as beneficial for both parties, especially as mattress and furniture sales had slowed post-pandemic. However, the FTC’s decision raised concerns about reduced competition harming consumers who often rely on financing for premium mattresses.
The FTC warned that the acquisition could potentially drive rivals like Serta Simmons Bedding and Purple Innovation, Inc. out of business, as the combined firm could take steps to steer customers away from competitors’ products.
In response, Tempur Sealy stated that they are working constructively with the FTC and believe the litigation process will be complete in the next few months. Mattress Firm also expressed disappointment with the decision but maintained belief in the benefits of the proposed acquisition.
This story has been updated with additional context, and CNN’s Jordan Valinsky contributed to this report.
