ASSA ABLOY, US Head to Trial over HHI AcquisitionApril 20th, 2023 by Travis Rains
ASSA ABLOY and the United States have yet to come to terms with respect to the latter’s lawsuit attempting to block the company’s acquisition of the HHI division of Spectrum Brands. After more than six months of deliberations, a D.C. District Court has scheduled the matter for a bench trial next week.
ASSA ABLOY’s agreement to acquire the HHI division of Spectrum Brands included a purchase price of $4.3 billion on a cash and debt-free basis, and was announced on September 8, 2021. On September 15, 2022, the U.S. Department of Justice (DOJ) blocked the proposed acquisition of HHI over competition concerns.
According to a Department of Justice news release, ASSA ABLOY and Spectrum are two of the three largest producers of residential door hardware in the $2.4 billion U.S. industry.
“Millions of Americans rely on these companies’ door hardware products every day to meet their most basic privacy and security needs,” says assistant attorney general Jonathan Kanter of the Justice Department’s Antitrust Division. “Competition between these two companies, which are two of the three largest companies in an already concentrated industry, has benefitted American consumers in the form of lower prices and better quality. That important competition would be extinguished if this merger were allowed to proceed to the detriment of Americans.”
The parties told the court at the end of February 2022 that they had come to a “narrow agreement” with respect to a handful of factors in the case, including that the U.S. could present evidence at trial about the “nature and intensity of existing competition” in relevant markets. They also agreed that products sold by defendants in relevant markets include no products other than those placed on a list agreed upon by both parties.
However, according to the U.S., a number of questions to be answered at trial remained. They included: which specific products are in the relevant product markets; the degree of concentration in the relevant markets; and the nature, extent and intensity of existing competition in those markets, “including whether and to what extent defendants compete with each other in those markets.”
According to the schedule for the United States District Court for the District of Columbia, the bench trial is set to begin at 10 a.m. Monday, April 24.