03:46 PM EDT, 07/02/2024 (MT Newswires) -- Tempur Sealy International's ( TPX ) proposed $4 billion acquisition of mattress specialty retailer Mattress Firm Group has the incentive to suppress competition and raise prices for consumers, the Federal Trade Commission said Tuesday in an official notice seeking to block the deal.

The commission issued an administrative complaint and authorized a lawsuit in federal court in an effort to stop the transaction from moving forward. Shares of Tempur Sealy ( TPX ) gained 2.2% ahead of market close.

"Through emails, presentations, and other deal documents, Tempur Sealy ( TPX ) has made it abundantly clear that its acquisition of Mattress Firm is intended to kneecap competitors and dominate the market," said Henry Liu, director of the FTC's Bureau of Competition.

"This deal isn't about creating efficiencies; it's about crippling the competition, which would raise prices on an essential good and could lead to layoffs for good paying American manufacturing jobs in nearly a dozen states," he said.

Tempur Sealy ( TPX ) said in a separate statement Tuesday it has been working constructively with the FTC to secure regulatory approval for the transaction, which it predicted in May 2023 would close in the second half of 2024. Most of the labor unions representing its employees have submitted letters of support, the bedding provider said.

"We are confident in the procompetitive rationale for this transaction and look forward to presenting the many benefits of the combination," Tempur Sealy ( TPX ) wrote. "We believe that a successful litigation process can be completed in the coming months, which would allow us to close the transaction in late 2024 or early 2025."

Mattress Firm told MT Newswires in an email that the transaction with Tempur Sealy ( TPX ) is expected to be beneficial to consumers and employees, as well as the overall bedding and furniture industry.

"We remain confident in this transaction, believing it will neither constrain nor limit competition," Mattress Firm said.

Price: 48.45, Change: +1.24, Percent Change: +2.62