WASHINGTON—The Federal Trade Commission on Monday sued to block a $1.37 billion deal in which the maker of Schick razors sought to buy upstart rival Harry’s Inc.
The FTC alleged that Edgewell Personal Care Co. ’s planned acquisition of Harry’s would eliminate one of the most important competitive forces in a shaving industry that has long been controlled by two entrenched companies.
Harry’s “has forced its rivals to offer lower prices, and more options, to consumers across the country,” Daniel Francis, deputy director of the FTC’s bureau of competition, said in a statement.
All of the FTC’s commissioners, three Republicans and two Democrats, voted in favor of the lawsuit, the latest signal that antitrust enforcers across the ideological spectrum remain willing to challenge deals that they believe could lead to higher prices for consumer staples.
Despite the setback for the deal, Edgewell’s share price jumped on the news, rising 13% Monday. Investors were wary of the deal due to the high multiple Edgewell agreed to pay for Harry’s, which was growing quickly but losing money.
The complaint alleges that Harry’s, launched in 2013, has shaken up a “comfortable duopoly” between Edgewell and Procter & Gamble, which sell their respective Schick and Gillette brands of men’s razors, and Intuition/Hydro Silk and Venus brands of women’s razors.
Procter & Gamble’s Gillette brand is the dominant industry leader. Edgewell had positioned itself as a lower-priced alternative, but its market position was eroding amid the rise of online shave clubs, as well as renewed efforts by Gillette to compete with the new online entrants.
Edgewell and Harry’s announced their deal last May. The companies said they were evaluating their options.
“We continue to believe the combination of our two companies would bring together complementary capabilities for the benefit of all stakeholders, including customers,” said Rod Little, Edgewell’s president and CEO.
Harry’s in recent years expanded from its online operations into bricks-and-mortar stores, making the company even more of a threat to traditional razor sales. It started selling in Target Corp. stores in 2016 and recently began selling razors and other men’s care products in Walmart Inc.
Harry’s chose a sale to Edgewell over going public or staying independent as a way to readily access capital markets.
The FTC signaled it would follow a two-tiered process to challenge the deal. It filed a complaint in its own administrative court system, and said it separately would go to federal court to seek a preliminary injunction to prevent the deal from closing for now.
The case is the latest in a flurry of merger challenges from the FTC, which in recent weeks has derailed deals that would have combined cereal makers and biotech companies.
—Chris Wack contributed to this article.
Write to Brent Kendall at brent.kendall@wsj.com and Sharon Terlep at sharon.terlep@wsj.com
Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Business - Latest - Google News
February 04, 2020 at 04:41AM
https://ift.tt/2uWTgMx
FTC Sues to Block Shaving Merger - The Wall Street Journal
Business - Latest - Google News
https://ift.tt/2Rx7A4Y
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
No comments:
Post a Comment