Tempur Sealy International Inc. (NYSE: TPX) announced the divestiture of 176 stores to appease the Federal Trade Commission’s (FTC) objection over its proposed $4 billion acquisition of Mattress Firm Group.
In conjunction with the planned Mattress Firm acquisition, Tempur Sealy entered into a purchase agreement with MW SO Holdings Company LLC, the parent of the Mattress Warehouse retail chain, for the sale of 73 Mattress Firm retail locations and Tempur Sealy’s Sleep Outfitters subsidiary, which includes 103 specialty mattress retail locations and seven distribution centers.
The divestiture is subject to the closing of Tempur Sealy’s acquisition of Mattress Firm and other customary closing conditions.
If the acquisition goes through, Tempur Sealy expects to operate over 2,800 retail locations worldwide and anticipates that half of its North American sales will come from the Mattress Firm operations.
“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,” said Tempur Sealy Chairman and CEO Scott Thompson.
Last month, the FTC issued a statement that was suing to block the Mattress Firm acquisition, claiming that Tempur Sealy “will have the ability and incentive to suppress competition and raise prices for mattresses for millions of consumers once it acquires Mattress Firm.”
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