A big monkey wrench has been thrown into the powerhouse merger of ASSA ABLOY and Spectrum Brands’ Hardware and Home Improvement (HHI) division: A federal lawsuit.
The U.S. Department of Justice said today that it would sue to block the $4.3 billion acquisition of HHI by ASSA ABLOY on antitrust grounds. ASSA ABLOY and HHI said it would defend the deal announced in September 2021.
In its complaint, filed in the U.S. District Court for the District of Columbia, the Justice Department charges that the merger would risk higher prices, lower quality, reduced innovation and poorer service in at least two types of residential door hardware: premium mechanical door hardware and smart locks.
“Competition between these two companies, which are two of the three largest companies in an already concentrated industry, has benefited American consumers in the form of lower prices and better quality,” Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division said in a statement. “That important competition would be extinguished if this merger were allowed to proceed to the detriment of Americans.”
ASSA ABLOY owns the Yale, August Home and Emtek brands. HHI owns the Kwikset and Baldwin brands.
According to the Justice Department’s statement, the transaction if completed would give ASSA ABLOY a “near-monopoly” in premium mechanical door hardware and more than a 50% share in smart locks. It further states that the merger would give ASSA ABLOY roughly a 50% share of the overall residential door hardware market.
In a statement, ASSA ABLOY said it and HHI “remain confident in the merits of this transaction and will jointly defend it,” adding they were confident they would “prevail in litigation.”
In a separate statement, David Maura, Spectrum Brands CEO, said, “Despite disagreeing strongly with the DOJ’s purported concerns, in the spirit of compromise – and to speed delivery of the concrete benefits this transaction offers all stakeholders – Spectrum Brands and ASSA ABLOY made numerous proposals to address the DOJ’s concerns, each of which were rejected without a valid basis. [DOJ’s] choice to pursue litigation places political ideology above the interests of American consumers and workers. We are confident that the court will agree with us and will allow us to close the transaction.”
The two companies had announced previously that they would extend their purchase agreement to June 30, 2023.
Will Christensen is Senior Editor of Locksmith Ledger International, a part of the SecurityInfoWatch Media Group.
