One week after the U.S. Federal Trade Commission sued Edgewell Personal Care Co. to block its proposed $1.37 billion acquisition of Harry’s Inc., the Shelton company has abandoned the transaction.
Edgewell, the manufacturer of the Schick razor brand, first announced its proposed acquisition last May.
Harry’s began as a direct-to-consumer wet shave brand in 2013 that sold its products exclusively online before moving into brick-and-mortar retail stores in 2016. The FTC claimed the rising competition of Harry’s forced Edgewell and its main competitor, Procter & Gamble, to reduce prices and developed previously unavailable value-priced products.
“Allowing Edgewell to bring that disruptor under control by acquiring Harry’s would have represented a big step back for competition,” said Daniel Francis, deputy director of the FTC’s Bureau of Competition. “This outcome is good news for consumers across the country.”
Edgewell President and CEO Rod Little did not share Francis’ diagnosis.
“We are disappointed by the FTC’s decision and continue to disagree with its position,” Little 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 standalone strategy is the best course of action for Edgewell and our shareholders.”
Little added that his company “is moving forward standalone with a strong foundation, a revamped management team and improving underlying performance, and we are confident in our ability to create value.”
Harry’s co-founders and co-CEOs, Jeff Raider and Andy Katz-Mayfield, said they would explore potential legal action against Edgewell for terminating the acquisition agreement.
“We continue to be perplexed by the FTC’s process and disregard of the facts,” they said in a press statement. “We know the merger would have benefited consumers greatly. We believe we would have prevailed in litigation, and are disappointed by the decision by Edgewell’s board not to see this process to its conclusion.”