Assa Abloy, the world’s largest lock maker, and Spectrum Brands, the maker of the Baldwin and Kwikset brands, have settled with the US Justice Department regarding Assa’s proposed $4.3 billion acquisition of Spectrum’s hardware and home improvement division (HHI). The Justice Department had filed a lawsuit last year to block the deal, citing concerns that it could lead to higher prices.
Assa Abloy is the maker of several lock brands, including Yale, August, and EMTEK, while Spectrum’s HHI division specializes in residential door hardware.
Settlement Reached
On Friday, Assa Abloy and Spectrum Brands announced that they have reached a settlement with the US Justice Department over the proposed deal. As part of the settlement, Assa Abloy will proceed with the divestment of its Emtek and Smart Residential business in the US and Canada to Fortune Brands.
The divestment of Emtek and the Smart Residential business is expected to address the concerns raised by the Justice Department regarding competition in the residential door hardware market. The terms of the settlement were not disclosed.
In a joint statement, Assa Abloy and Spectrum Brands said that they were “pleased to have reached a settlement with the US Department of Justice that will allow us to complete the sale of HHI to Assa Abloy and enable us to focus on our core businesses.”
Lawsuit by the US Justice Department
Last year, the US Justice Department filed a lawsuit to block Assa Abloy’s proposed acquisition of Spectrum’s HHI division, citing concerns that the deal would harm competition and lead to higher prices for consumers.
The lawsuit alleged that the combined company would have a market share of over 70% in the US residential lock market, and that the proposed deal would result in higher prices, reduced innovation, and fewer choices for consumers.
Assa Abloy had countered that the proposed acquisition would enhance competition and innovation in the market, and that the company had made significant efforts to address the concerns raised by the Justice Department.
Conclusion
Assa Abloy and Spectrum Brands’ settlement with the US Justice Department marks the end of a year-long legal battle over the proposed acquisition of Spectrum’s HHI division. The settlement allows Assa Abloy to proceed with the acquisition while addressing the concerns raised by the Justice Department regarding competition in the residential door hardware market.
The divestment of Emtek and the Smart Residential business to Fortune Brands will ensure that competition in the market is preserved, and that consumers continue to have a range of choices when it comes to residential door hardware.
