FTC Files Suit to Halt Tempur Sealy's $4 Billion Acquisition by Mattress Firm, Impacting Vizio's Proposed Sale to Walmart

Vizio's stock fell by 1.2% due to the Federal Trade Commission's (FTC) lawsuit aiming to halt Tempur Sealy's $4 billion acquisition of Mattress Firm. This move echoes the FTC's scrutiny of Walmart's purchase of Vizio, raising concerns about vertical deal price increases and potential privacy issues. Vizio's sale to Walmart for $2.3 billion is also under the FTC's antitrust microscope.

The recent decline in Vizio's stock price by 1.2% can be attributed to the US Federal Trade Commission's (FTC) intention to block the $4 billion acquisition of Mattress Firm by Tempur Sealy International Inc. This development mirrors the FTC's earlier scrutiny of Walmart's purchase of Vizio, raising concerns about potential price increases and privacy issues in vertical deals [1].

The FTC's concerns center around the impact of the merger on manufacturing jobs, particularly in the domestic mattress industry. In 2023, around $7.8 billion in mattress sales were recorded in the US, compared to $809 million in imports [2]. The FTC, under the leadership of Chair Lina Khan, has been scrutinizing the effects of mergers on workers' bargaining power in specific labor markets. This concern is shared with the agency's efforts to prevent the merger between grocery chains Kroger and Albertsons [1].

Tempur Sealy had announced its intentions to acquire Mattress Firm in May 2023, seeking to add over 2,300 brick-and-mortar store locations to its existing portfolio [1]. The combined company would have approximately 3,000 stores globally. In response to potential regulatory concerns, Tempur Sealy has stated that it could divest some stores and has signed agreements with six other mattress makers to allow Mattress Firm stores to continue carrying their brands [1].

Vizio, a consumer electronics company, was acquired by Walmart in 2020 for $2.3 billion. This transaction is also under the FTC's antitrust microscope [1]. The FTC's scrutiny of these transactions highlights its efforts to ensure that mergers do not result in anticompetitive practices or diminished worker bargaining power.

References:

[1] Jody Godoy. (2023, June 13). US to block Tempur Sealy's $4 billion buy of retailer Mattress Firm. Retrieved from https://finance.yahoo.com/news/us-block-tempur-sealys-4-142931866.html

[2] Jody Godoy. (2023, June 13). US to block Tempur Sealy's $4 billion buy of retailer Mattress Firm. Retrieved from https://www.investing.com/news/stock-market-news/us-to-block-tempur-sealys-4-billion-buy-of-retailer-mattress-firm-3505607