Tempur Sealy Triumphs: Court Rejects FTC's Block of Mattress Firm Acquisition

In a significant legal victory for Tempur Sealy, the U.S. District Court for the Southern District of Texas has denied the Federal Trade Commission's (FTC) request to block its acquisition of Mattress Firm. The court's decision marks another setback for the FTC in its attempts to challenge vertical mergers. Judge Eskridge's ruling emphasized that the merger did not pose a significant threat to competition, rejecting the FTC's narrow definition of a premium mattress market and its predictions of consumer harm. The court favored the argument that the merger would eliminate double marginalization, allowing cost savings to potentially benefit consumers. Tempur Sealy's past independence from Mattress Firm and existing alternative retail channels weakened the FTC's foreclosure theory. Furthermore, Tempur Sealy's commitment to maintaining diversity in Mattress Firm's offerings was accepted as credible assurances. The court's decision reinforces the cautious stance taken by the judiciary in vertical merger enforcement.