US to block Tempur Sealy's $4 billion Mattress Firm deal

By Jody Godoy

(Reuters) - The U.S. Federal Trade Commission said on Tuesday it will sue to block the $4 billion merger between mattress manufacturer Tempur Sealy International Inc and retailer Mattress Firm. Tempur Sealy had announced the cash-and-stock deal in May 2023, seeking to add Mattress Firm's more than 2,300 brick-and-mortar store locations. The combined company would have about 3,000 stores globally.

The FTC voted 5-0 to block the deal, voicing concern about the effects on competition with rivals Serta Simmons Bedding and Purple Innovation Inc.

"By cutting off or degrading rivals' access to Mattress Firm as a retail channel, Tempur Sealy’s acquisition could result in higher mattress prices, decreased product quality and choice, or reduced innovation," the FTC said in a statement.

Spokespersons for Tempur Sealy and Mattress Firm did not immediately respond to requests for comment on the FTC's announcement.

Tempur Sealy has said it expected to complete the purchase of Mattress Firm in the second half of 2024.

To address potential regulatory concerns, Tempur Sealy has said it could divest some stores, and in May said it signed agreements with six other mattress makers for Mattress Firm stores to continue carrying their brands.

(Reporting by Jody Godoy; Editing by Chizu Nomiyama)