The U.S. Federal Trade Commission is suing to block Shelton-headquartered Edgewell Personal Care Co. from moving forward with its proposed $1.37 billion acquisition of Harry”™s Inc.
The FTC stated that the acquisition would “eliminate one of the most important competitive forces in the shaving industry,” adding that Harry”™s is “a critical disruptive rival that has driven down prices and spurred innovation in an industry that was previously dominated by two main suppliers, one of whom is the acquirer.”
“The Harry”™s and Flamingo brands represent a significant and growing competitive threat to the two firms that have dominated the wet shaving market for decades,” said Daniel Francis, deputy director of the FTC”™s Bureau of Competition. “Edgewell”™s effort to short-circuit competition by buying up its newer rival promises serious harm to consumers.”
Harry”™s began as a direct-to-consumer wet shave brand in 2013 that sold its products exclusively online. In 2016, Harry”™s expanded its sales into brick-and-mortar retail stores. The FTC claimed Procter & Gamble and Edgewell were forced to reduce prices and developed previously unavailable value-priced products as a result of this third entity in the market.
The FTC voted unanimously to issue the administrative complaint and to authorize staff to seek a temporary restraining order and preliminary injunction. An administrative trial is scheduled to begin on June 30.
When the acquisition of Harry”™s was announced last May, Edgewell President and CEO Rod Little said, “Building on Edgewell”™s and Harry”™s complementary strengths, our combined company will have leading brands and omni-channel capabilities that are essential to meet the needs of the modern consumer and win in today”™s market environment.”
Little responded to the news in a press statement. “We continue to believe the combination of our two companies would bring together complementary capabilities for the benefit of all stakeholders, including customers. We will review the FTC’s decision and respond in due course,” he said.
Jeff Raider and Andy Katz-Mayfield, co-founders and co-CEO’s of Harry’s, responded in the same press statement. “We are disappointed that the FTC is attempting to block our combination with Edgewell and are evaluating the best path forward,” the said. “We believe strongly that the combined company will deliver exceptional brands and products at a great value and are determined to bring those benefits to consumers.”
