Consumer products company Edgewell Personal Care says uncertainty created by FTC action scuttled deal.
In the face of an FTC challenge to Edgewell Personal Care Company’s proposed $1.37 billion acquisition of its online competitor Harry’s, Inc., Edgewell announced today that it is terminating the merger agreement and moving forward as a stand-alone company. The FTC reported last week that it intended to block the deal. The Commission issued an administrative complaint and said that it would seek to a preliminary injunction to stop the acquisition pending Part 3 administrative review.
While Edgewell, which sells the razor brand Schick, as well as shave gels and other personal care products, disagreed with the FTC’s decision, Rod Little, the company’s president and CEO, said: "After extensive consideration and discussion, and given the inherent uncertainty of a potential trial, the required investment of resources and time and the distraction that a continuing court battle would entail, we determined that proceeding with our stand-alone strategy is the best course of action for Edgewell and our shareholders."
The company’s announcement notes that Harry’s has informed Edgewell that it intends to pursue litigation over the abandoned transaction. Edgewell contends that such litigation has no merit.
Harry’s did not release an official statement on the apparent litigation. However, Jeff Raider and Andy Katz-Mayfield, co-founders and Co-CEO's of Harry’s, did question Edgewell’s decision not to defend the acquisition in the FTC action.
FTC challenge. The FTC had objected to the transaction on the ground that it would eliminate one of the most important competitive forces in the shaving industry. In a speech delivered on February 8, FTC Bureau of Competition Director Ian Conner highlighted the challenge as an example of the agency’s efforts to target acquisitions of nascent competitors. The proposed acquisition would allegedly have eliminated 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 have removed 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. The administrative proceeding will likely be dismissed now that Edgewell has dropped the deal.
Companies: Edgewell Personal Care Co.; Harry’s Inc.
MainStory: TopStory AcquisitionsMergers Antitrust AntitrustDivisionNews FederalTradeCommissionNews
Interested in submitting an article?
Submit your information to us today!Learn More
Antitrust Law Daily: Breaking legal news at your fingertips
Sign up today for your free trial to this daily reporting service created by attorneys, for attorneys. Stay up to date on antitrust legal matters with same-day coverage of breaking news, court decisions, legislation, and regulatory activity with easy access through email or mobile app.