Wall Street Breakfast Podcast: FTC Blocks Tempur-Sealy Deal
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FTC files lawsuit to block Tempur Sealy’s (TPX) $4 billion purchase of Mattress Firm. (00:23) Electric vehicle maker Rivian (RIVN) has no production plans with Volkswagen – report. (01:42) Eli Lilly (LLY) gets FDA approval for donanemab for Alzheimer’s disease. (02:27)
This is an abridged transcript of the podcast.
The Federal Trade Commission has filed a lawsuit seeking to block mattress maker Tempur Sealy’s (NYSE:TPX) proposed $4 billion acquisition of Mattress Firm.
According to a statement from the FTC on Tuesday, the regulator has filed an administrative complaint and authorized a lawsuit in federal court to block the deal, alleging that Tempur Sealy — the world’s largest mattress supplier and manufacturer — will have the ability and incentive to “suppress competition” and raise mattress prices for millions of consumers once it acquires Mattress Firm.
The Commission voted 5-0 to authorize the legal action to challenge the transaction.
“Through emails, presentations and other agreement documents, Tempur Sealy has made clear that its acquisition of Mattress Firm is designed to bring its competitors to their knees and dominate the market,” Henry Liu, director of the FTC’s Bureau of Competition, said in the statement.
Tempur Sealy (TPX) responded to the FTC’s complaint in a statement Tuesday and said it believes “the FTC’s view does not reflect all of the relevant facts and law.”
“We believe that a successful litigation process can be completed in the coming months, which would allow us to close the transaction in late 2024 or early 2025,” Tempur Sealy said in the statement.
Tempur Sealy (TPX) has agreed to buy Mattress Firm in a $4 billion deal in May 2023.
Rivian Automotive (NASDAQ:RIVN) denies rumors and says it has no plans to expand its partnership with Volkswagen (OTCPK:VWAGY) for vehicle production.
A German newspaper, Handelsblatt, had earlier reported that the companies were considering joint production of Rivian’s (RIVN) smaller and more affordable R2 SUV at Volkswagen’s (OTCPK:VWAGY) new plant in South Carolina.
However, a spokesperson for Rivian (RIVN) told Reuters: “There are no plans to produce vehicles with the Volkswagen Group.” The company plans to start production of the R2 at its Normal, Illinois, plant before moving to the Georgia plant, the spokesperson said in an emailed statement.
Rivian (RIVN) gained more than 25% after announcing a $5 billion deal with Volkswagen (OTCPK:VLKAF) to share electrical architecture and software technology.
The U.S. FDA has approved Eli Lilly’s (NYSE:LLY) donanemab as a treatment for early-stage Alzheimer’s disease. The treatment, given as a once-monthly infusion, will be marketed under the name Kisunla.
Lilly said the treatment would cost $12,522 over six months and $32,000 per year. The 12-month cost includes 13 infusions, while the six-month cost assumes six. In June, a U.S. FDA advisory committee unanimously endorsed the drug’s effectiveness.
Kisunla will compete with Biogen (BIIB) and Eisai (OTCPK:ESALF)(OTCPK:ESAIY) Leqembi (lecanemab).
The list price of Leqembi, given every two weeks, is $26,500 for one year. However, the FDA must decide in January 2025 whether to approve a monthly version.
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Catalyst Watch:
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Despicable Me 4, produced by Universal Studios (CMCSA), will be released in the United States. The film is expected to exceed $100 million in its extended five-day opening weekend. The franchise has a strong track record with Despicable Me ($251.7 million), Despicable Me 2 ($368 million), Minions ($336 million), Despicable Me 3 ($264.6 million) and Minions: 20 Years After Gru ($370.2 million) all performing well at the box office.
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The three-day Droidcon Berlin conference for Android developers will kick off in Berlin.
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ASLAN Pharmaceuticals (ASLN) will begin trading on a post-split basis following the one-for-eight reverse split of the ADSs.
Now let’s take a look at the markets at 6 a.m. Ahead of today’s open, Dow, S&P and Nasdaq futures are in the green. Crude oil is flat at $82 a barrel. Bitcoin is down 3.4% at $60,000.
On global markets, the FTSE 100 is up 0.6% and the DAX is up 1%.
Biggest movers of the day before the market open: Shares of First Foundation (NYSE: FFWM) fell more than 27% after the company announced a $228 million equity investment led by Fortress Investment Group, Canyon Partners, Strategic Value Bank Partners and North Reef Capital.
Today’s economic agenda:
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7:00 a.m. – Federal Reserve Bank of New York President John Williams is expected to speak at an ECB forum.
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10:30 The EIA’s crude oil inventories report is expected to attract more attention than usual.
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1:00 p.m. US stock markets will close early ahead of the Independence Day holiday.
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2:00 p.m. The Federal Reserve will release the minutes of the June FOMC meeting.
Editor’s Note: This article discusses one or more securities that are not traded on a major U.S. exchange. Be aware of the risks associated with these securities.
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