ASSA ABLOY said it is preparing to sell its Emtek and Yale smart residential business in the U.S. and Canada in response to the U.S. Department of Justice's complaint to block the proposed acquisition of the Hardware and Home Improvement division of Spectrum Brands.
ASSA ABLOY announced Sept. 8 that it signed an agreement to acquire the HHI division of Spectrum Brands for a purchase price of MUSD 4,300 on a cash and debt free basis. The DOJ announced Sept. 15 that it would seek to block the proposed acquisition of HHI.
"To fully resolve all the alleged competitive concerns surrounding the acquisition of HHI, ASSA ABLOY has initiated a sales process of Emtek and the Smart Residential business in the U.S. and Canada," ASSA ABLOY said in a statement. "These businesses represented sales of about MUSD 350 in 2021. Residential businesses outside of the U.S. and Canada are not in scope to be divested."
ASSA ABLOY adds that the company, along with Spectrum Brands, is "vigorously contesting" in court the effort by the DOJ to oppose the proposed transaction.
"We believe strongly in the acquisition of HHI as we together will increase investments in the residential segments and strengthen our combined product offering for the benefit of consumers. The proposed remedies eliminate all competitive concerns alleged by the DOJ,” said Nico Delvaux, President and CEO of ASSA ABLOY.
"The proposed divestitures are dependent on our successful defense against the DOJ regarding the planned acquisition of HHI. ASSA ABLOY will remain fully committed to these excellent businesses during the process and all the businesses will continue to operate as normal."
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.”