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(Bloomberg) -- Tempur Sealy International Inc. was cleared to move forward with its $4 billion acquisition of Mattress Firm Inc. after a federal judge in Texas rejected a claim by the US Federal Trade Commission that the deal would hurt consumers.
US District Judge Charles Eskridge ruled Friday in favor of the companies, but he said they can’t close the deal until Feb. 7, to allow time for the regulator to consider an appeal. The ruling is a significant defeat for the FTC, which had increased antitrust enforcement under the Biden administration.
Eskridge didn’t explain his ruling, which he filed under seal, citing confidential and proprietary information that informed his reasoning. A redacted version of the full decision will be made available on Tuesday, he said in the public filing announcing his order.
Tempur Sealy is the world’s largest mattress maker with top brands including Tempur-Pedic, Sealy Posturepedic and Stearns & Foster. Mattress Firm, owned by South African retailer Steinhoff International Holdings NV, operates more than 2,300 stores across 49 states.
The FTC sued to block the transaction in July, arguing the takeover violates antitrust laws and would reduce options for US mattress buyers.
The agency claimed Tempur Sealy would be able to hobble competitors like Serta Simmons Bedding LLC and Resident Home LLC, which sells the Nectar brand, by preventing them from being distributed in Mattress Firm stores. The companies argued online sales would help replace any competition lost as a result of the merger.
Tempur Sealy said it was “pleased” with the decision. “Despite the FTC’s ongoing efforts to block the transaction, we will make every effort to close it as soon as possible,” the company said in a statement.
The FTC didn’t immediately return a request for comment. The agency can appeal Friday’s decision to the US 5th Circuit Court of Appeals in New Orleans.
Stepped-up antitrust enforcement by the FTC has had mixed results in recent years. The agency lost a challenge to Microsoft Corp.’s acquisition of Activision Blizzard Inc., but succeeded in blocking Illumina Inc.’s purchase of startup Grail.
The case is Federal Trade Commission v. Tempur Sealy, 24-cv-2508, US District Court, Southern District of Texas (Houston).
(Updates with company comment.)
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