* Mattress deal valued at around $1.3 billion
* Mattress companies consolidating
* Recession, sexy electronics cut into mattress sales
WASHINGTON, March 8 Tempur-Pedic International
Inc, the Kentucky company which pioneered pricey
space-age mattresses, has won approval from antitrust regulators
to buy century-old Sealy Corp, the company said on
Tempur-Pedic put the total value of the transaction - stock
purchases and acquired debt - at $1.3 billion.
"The combination of Tempur-Pedic and Sealy unites two highly
complementary companies with iconic brands to create the first
full spectrum, global bedding company," said Mark Sarvary,
Tempur-Pedic's chief executive officer, in a statement.
The FTC posted letters on its website saying that it had
closed its investigation into the merger, effectively indicating
that it approved the deal.
The deal, which Tempur-Pedic said will close on March 18, is
the latest transaction shrinking the number of U.S. mattress
As recently as five years ago, no mattress company had a
U.S. market share above 20 percent.
But combining Sealy and Tempur-Pedic would give it 31.7
percent of the U.S. market while Serta and Simmons, which have
had common ownership since 2009, would have 33.8 percent,
according to 2011 data from the industry publication Furniture
Today, which calculates market share by the dollar value of
The merging companies have argued, however, that their
market share is lower, as measured by unit sales of beds,
putting Tempur-Pedic's closer to 3 percent and Sealy around 13
Market consolidation was triggered by the great recession
and the associated decline in new household formation, along
with the flood of consumer electronics that compete with more
utilitarian items for Americans' disposable income.
In 2007, mattress sales rose 1.4 percent to an all-time high
of almost $6.9 billion and then fell sharply during the
recession, according to the International Sleep Products
Association. Sales were $6.3 billion in 2011, the ISPA said.
Tempur-Pedic sought out Sealy as it fights to keep the
burgeoning market for expensive foam mattresses and accessories.
The deal would also allow the company to gain a toehold in the
bigger inner-spring segment.