[Update as of Feb. 6, 2025] Tempur Sealy International has completed its acquisition of Mattress Firm for a purchase price of approximately $5 billion, a 25% increase over the original $4 billion price tag. Additionally, effective Feb. 18, 2025, Tempur Sealy will change its name to Somnigroup International. Mattress Firm, Dreams and Tempur Sealy will operate as decentralized business units; Mattress Firm and Dreams will continue to operate as multi-brand retailers, and Tempur Sealy, which is primarily a manufacturer, will continue to serve third-party retailers as well as the DTC channels of the Somnigroup brands.
“The addition of Mattress Firm will unlock incremental benefits for all stakeholders by accelerating our U.S. omnichannel strategy,” said Scott Thompson, CEO and Chair of Tempur Sealy International in a statement. “This transaction creates a leading global bedding company with extensive manufacturing capabilities and a broader U.S. retail footprint. Together, the companies are positioned to facilitate enhanced product innovation, improve the customer buying experience and ensure high-quality, durable products are brought to market.”
[Update as of Feb. 3, 2025] A federal court in Texas has cleared a hurdle that had been blocking the planned $4 billion acquisition of Mattress Firm by rival Tempur Sealy International, according to Furniture Today and other media outlets. However, the ruling from the U.S. Federal Court for the Southern District of Texas also granted the Federal Trade Commission’s request from last week to extend the temporary restraining order that had been blocking the deal for seven days so that the agency could pursue an appeal to the Fifth Circuit Court of Appeals if it chooses to do so.
A Tempur Sealy statement expressed pleasure at the court’s decision and said that “despite the FTC’s efforts to block the transaction, we will make every effort to close it as soon as possible.”
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Original story from July 3, 2024 begins-
All five Federal Trade Commissioners voted to halt Tempur Sealy International’s planned $4 billion acquisition of Mattress Firm, saying that as the world’s largest mattress supplier and manufacturer, Tempur Sealy’s purchase of the 2,400-store retailer would give it “the ability and incentive to suppress competition and raise prices for mattresses for millions of consumers,” according to an FTC statement.
“Multiple deal documents show that Tempur Sealy plans to limit rivals’ access to Mattress Firm’s nationwide network of stores to harm competition,” said the statement. “Competing mattress suppliers — which are predominantly American manufacturers employing thousands of workers — are likely to lose access to the single most important retail channel, significantly impairing their ability to compete and potentially leading competing suppliers to reduce output, close factories and lay off workers.”
Tempur Sealy protested the FTC’s move, which includes a lawsuit to be filed in the U.S. District Court for the Southern District of Texas. “Tempur Sealy has been working constructively with the FTC to secure regulatory approval for this transaction and is disappointed that the FTC has initiated litigation,” according to a company statement, adding that “the bedding industry is highly competitive, offering consumers a diverse selection of products, brands, price points and purchasing channels. There are thousands of brick-and-mortar storefronts across the United States where consumers can purchase bedding products, only a small fraction of which are operated by Mattress Firm. Additionally, brick-and-mortar retailers and direct-to-consumer bedding brands sell millions of bedding products online each year.”
The FTC, however, expressed deep concerns about this vertical acquisition, which would combine a major manufacturer and a leading retailer. “The acquisition would enable Tempur Sealy’s mattress brands — which include Stearns & Foster and Tempur-Pedic — to dominate the market over those of its competitors. 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.”
Tempur Sealy first announced the acquisition in May 2023. Mattress Firm, which had been through a bankruptcy and several owners, had planned an IPO but had cancelled it in January 2023, citing market volatility. Until the FTC decision preparations for the purchase were proceeding: mattress manufacturer Purple Innovation resolved its IP disputes with Tempur Sealy and established new partnership parameters in anticipation of the Mattress Firm acquisition in March 2024.
