Antitrust M&A Snapshot | Q1 2025 | McDermott Will & Emery

JANUARY – MARCH 2025: KEY THEMES AND TAKEAWAYS –

UNITED STATES –

FTC Loses Vertical Challenge to Tempur Sealy/Mattress Firm

On July 2, 2024, the US Federal Trade Commission (FTC) filed suit in federal court seeking to block a proposed $4 billion merger between mattress manufacturer Tempur Sealy International, Inc., and mattress retail chain Mattress Firm Group Inc. The FTC expressed concern that the merger would result in anticompetitive behavior from the companies, allowing Tempur Sealy to raise premium mattress prices for consumers through a customer foreclosure theory. The FTC alleged several vertical theories of harm, including Tempur Sealy foreclosing other mattress manufacturers, such as Serta Simmons or Purple from selling their products through Mattress Firm or disadvantaging them by limiting the purchase of their inventory, the floor space designated for their products, or the commissions paid to sales representatives when they sell rival mattresses. The agency also argued that the proposed remedies, including agreements to carry a certain percentage of mattress competitors’ products at Mattress Firm stores, were insufficiently limited in terms of timing and enforceability. In response, Tempur Sealy stated it planned to operate Mattress Firm as an independent chain, explaining that restricting mattress manufacturer competitors’ access to Mattress Firm stores did not make business sense, as it would substantially shrink Mattress Firm’s business.

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