Antitrust Law Daily FTC seeks to block Schick razor maker’s acquisition of online razor seller Harry’s
Monday, February 3, 2020

FTC seeks to block Schick razor maker’s acquisition of online razor seller Harry’s

By Jody Coultas, J.D.

Agency alleges that the proposed acquisition of wet shave razor seller Harry’s by competitor Edgewell Personal Care would remove a critical disruptive rival in the market. Separately, the agencies extend comment period on draft vertical merger guidance and announce related workshop.

The FTC has filed suit seeking to temporarily block Edgewell Personal Care Company’s proposed $1.37 billion acquisition of its online competitor Harry’s, Inc., pending administrative review. The agency alleges that the transaction would eliminate one of the most important competitive forces in the shaving industry. The administrative trial is scheduled to begin on June 30, according to the FTC.

Edgewell Personal Care manufacturers and sells the razor brand Schick, as well as shave gels and other personal care products. The company is the leading supplier of private label razors in the U.S. Its largest competitor is Procter & Gamble, which sells the Gillette and Venus razor brands. For many years, according to the FTC, Edgewell and P&G operated their brands as a comfortable duopoly characterized by annual price increases that were not driven by changes in costs or demand.

Harry’s launched as an Internet-only, direct-to-consumer wet shave brand, and in 2016, Harry’s entered into brick-and-mortar retail stores. As a result of this new competitive threat, P&G and Edgewell reduced prices and developed previously unavailable value-priced products, generating significant benefits for consumers.

By acquiring Harry’s, the complaint alleges, the proposed acquisition would eliminate important and growing competition among suppliers of wet shave razors, and would inflict significant harm on consumers of razors across the United States. The loss of Harry’s as a competitor would remove a critical disruptive rival that has driven down prices and spurred innovation in an industry that was previously dominated in part by Edgewell, according to the FTC.

"Harry’s is a uniquely disruptive competitor in the wet shave market, and it has forced its rivals to offer lower prices, and more options, to consumers across the country," said Daniel Francis, Deputy Director of the FTC’s Bureau of Competition. "The Harry’s and Flamingo brands represent a significant and growing competitive threat to the two firms that have dominated the wet shaving market for decades. Edgewell’s effort to short-circuit competition by buying up its newer rival promises serious harm to consumers."

Edgewell’s President and CEO Rod Little said, "We continue to believe the combination of our two companies would bring together complementary capabilities for the benefit of all stakeholders, including customers. We will review the FTC's decision and respond in due course."

"We are disappointed that the FTC is attempting to block our combination with Edgewell and are evaluating the best path forward. We believe strongly that the combined company will deliver exceptional brands and products at a great value and are determined to bring those benefits to consumers," said Jeff Raider and Andy Katz-Mayfield, co-founders and Co-CEO's of Harry's, Inc.

Vertical merger guidelines comment period extended, workshop announced. In other merger news, t the FTC and Justice Department announced today that the deadline to submit comments on the draft Vertical Merger Guidelines has been extended to February 26. The agencies will also hold two public workshops on the Guidelines on March 11 and 18. Commenters may indicate whether they are interested in speaking at the workshops. Speaking requests should indicate whether the proposed speaker is affiliated with any entity that has provided funding for research, analysis, or commentary on relevant topics.

Companies: Edgewell Personal Care Company; Harry’s Inc.

MainStory: TopStory AcquisitionsMergers Antitrust AntitrustDivisionNews FederalTradeCommissionNews

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