ASSA Acquisition DoJ Roadblock
♦ ASSA Acquisition DoJ Roadblock – The U.S. Department of Justice has filed a civil antitrust lawsuit over ASSA ABLOY’s $US4.3 billion acquisition of the Hardware and Home Improvement division of Spectrum Brands.
According to DoJ’s filing in the U.S. District Court for the District of Columbia, the merger would eliminate important head-to-head competition between ASSA ABLOY and Spectrum, “risking higher prices, lower quality, reduced innovation and poorer service in the sale of at least 2 types of residential door hardware: premium mechanical door hardware and smart locks”.
“Millions of Americans rely on these companies’ door hardware products every day to meet their most basic privacy and security needs,” said assistant attorney general Jonathan Kanter of the Justice Department’s Antitrust Division.
“Competition between these 2 companies, which are 2 of the 3 largest companies in an already concentrated industry, has benefitted American consumers in the form of lower prices and better quality. That important competition would be extinguished if this merger were allowed to proceed to the detriment of Americans.”
The complaint alleges that ASSA ABLOY and Spectrum have competed for years to be leaders in the U.S. markets for premium mechanical door hardware and smart locks. It states that the proposed transaction would transform these markets, giving ASSA ABLOY a near-monopoly in premium mechanical door hardware and more than a 50 per cent share in smart locks, leaving only one significant competitor. Additionally, a combined ASSA ABLOY/Spectrum would control approximately 50 per cent of the overall residential door hardware market.
“Despite disagreeing strongly with the DOJ’s purported concerns, in the spirit of compromise — and to speed delivery of the concrete benefits this transaction offers all stakeholders — Spectrum Brands and ASSA ABLOY made numerous proposals to address the DOJ’s concerns, each of which were rejected without a valid basis,” said Spectrum Brands CEO, David Maura, in a statement.
“Their choice to pursue litigation places political ideology above the interests of American consumers and workers. We are confident that the court will agree with us and will allow us to close the transaction.”
The companies have agreed to extend their existing acquisition agreement to June 30, 2023.
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