Tempur Sealy International Inc. has received approval to proceed with its $4 billion acquisition of Mattress Firm Inc. after a federal judge in Texas dismissed a claim from the US Federal Trade Commission (FTC) that the merger would negatively impact consumers. US District Judge Charles Eskridge ruled in favor of the companies on Friday, but stipulated that the deal cannot be finalized until February 7, allowing time for the FTC to consider an appeal. This ruling represents a significant setback for the FTC, which has intensified antitrust enforcement under the Biden administration. The judge did not provide an explanation for his decision, which was filed under seal due to confidential and proprietary information. A redacted version of the ruling will be released on Tuesday.
Tempur Sealy is the largest mattress manufacturer globally, with well-known brands such as Tempur-Pedic, Sealy Posturepedic, and Stearns & Foster. Mattress Firm, owned by South African retailer Steinhoff International Holdings NV, operates over 2,300 stores across 49 states. The FTC had filed a lawsuit in July to block the acquisition, arguing that it would violate antitrust laws and limit choices for US mattress consumers. The agency contended that Tempur Sealy could hinder competitors like Serta Simmons Bedding LLC and Resident Home LLC, which markets the Nectar brand, by restricting their distribution in Mattress Firm stores. In response, the companies argued that online sales would compensate for any lost competition due to the merger.
Tempur Sealy expressed satisfaction with the ruling, stating, “Despite the FTC’s ongoing efforts to block the transaction, we will make every effort to close it as soon as possible.” The FTC has not yet commented on the decision. The agency has the option to appeal the ruling to the US 5th Circuit Court of Appeals in New Orleans. The FTC’s recent antitrust enforcement efforts have yielded mixed outcomes, having lost a challenge against Microsoft Corp.’s acquisition of Activision Blizzard Inc. while successfully blocking Illumina Inc.’s purchase of startup Grail. The case is Federal Trade Commission v. Tempur Sealy, 24-cv-2508, US District Court, Southern District of Texas (Houston).
