On January 31, 2025, Simpson Thacher secured a win for Mattress Firm Group Inc. in the Southern District of Texas when U.S. District Judge Charles Eskridge denied the FTC’s motion for a preliminary injunction to block Mattress Firm’s acquisition by Tempur Sealy International, Inc. Contrary to the FTC’s allegations that “millions of Americans would likely face higher prices, lower quality, and fewer choices,” the Court found that the acquisition is “either neutral or procompetitive” and “in the public interest.” The FTC declined to seek an injunction pending appeal, allowing the acquisition to close on February 5.
In the 115-page opinion and order, Judge Eskridge, said, “Failure to prove a relevant antitrust market alone requires denial of the preliminary injunction requested by the FTC,” and further, “any potential foreclosure won’t lead to anticompetitive effects in this very competitive market.” With respect to the relevant product market, the judge found that the evidence “established more persuasively that a definitional approach by mere price-band classifications is arbitrary” and “Defendants convincingly establish that the [hypothetical monopolist test] analysis is both inappropriate and unreliably implemented, at least as done by the FTC’s expert here.”
Following the May 2023 announcement, Tempur Sealy and Mattress Firm complied with Second Requests from the FTC regarding the proposed acquisition. On July 2, 2024, the FTC moved to block the merger by seeking a preliminary injunction in federal court in the Southern District of Texas, and challenging the transaction in the FTC’s Administrative Court. Tempur Sealy and Mattress Firm filed their answers and defenses in the federal case on July 23, 2024. After an accelerated discovery period, trial began November 12 and ended November 25, 2024. Closing arguments were held on December 16, 2024.
The total purchase price was approximately $5 billion. The transaction was funded by approximately $2.7 billion of cash consideration (subject to adjustments) and 34.2 million shares of common stock.
The team was named First Runner Up in The American Lawyer’s “Litigator of the Week” coverage.
The Simpson Thacher Antitrust team included Sara Razi, Preston Miller, Lindsey Bohl, Avia Gridi, Nicholas Ingros, Geoffrey Schmelkin, Nicholas Prendergast, Lara Fishbane and Calvin Reeh. The Firm’s Corporate team included Roxane Reardon, Jonathan Corsico, Sean Dougherty, John Dougherty, Lawrence Ekin, Tobi Olajubu, Nicolle Heagney and David Jennings. The Simpson Thacher team also included Andrew Blau, Alisa Tschorke and Mtume Sangiewa (ECEB); Sophie Staples, William Smolinski and Lina Pan (Tax); Lori Lesser, Corina Holland and Christine Song (IP); Krista McManus and Dennis Loiacono (Real Estate); Toby Chun and Deepa Sarkar (Environmental); and Christopher Brown, Tina Zheng and Alexandra Cullen (Banking & Credit).