DOJ Sues to Block $4B Hardware, Home Improvement Procurement
The U.S. Department of Justice filed an antitrust civil suit on Thursday to block ASSA ABLOY AB’s proposed $4.3 billion acquisition of the hardware and home improvement division of rival Spectrum Brands Holdings Inc.
ASSA ABLOY and Spectrum are two of the top three producers of home door hardware in the concentrated $2.4 billion US industry.
The complaint, filed in the US District Court for the District of Columbia, alleges that the merger would eliminate important direct competition between ASSA ABLOY and Spectrum, risking higher prices, inferior quality, reduced innovation and poorer service in selling fur. least two types of home door hardware: premium mechanical door hardware and smart locks.
“Millions of Americans rely on these companies’ door hardware products every day to meet their most basic privacy and security needs,” said Assistant Attorney General Jonathan Kanter of the Department of Justice’s Antitrust Division. “Competition between these two companies, which are two of the top three companies in an already concentrated industry, has benefited American consumers in the form of lower prices and better quality. This important competition would be extinguished if this merger were allowed to the detriment of Americans.”
The complaint, which seeks to enforce the transaction under Section 7 of the Clayton Act, alleges that ASSA ABLOY and Spectrum have been competing for years to be leaders in the US markets in premium mechanical door hardware and smart locks. The proposed transaction would transform these markets, giving ASSA ABLOY a near monopoly in premium mechanical door hardware and more than a 50% share in smart locks, leaving only one significant competitor. More broadly, an ASSA ABLOY/Spectrum combination would control approximately 50% of the overall residential door hardware market. Hundreds of millions of dollars worth of premium mechanical door hardware and smart locks are sold each year in the United States. The premium mechanical door hardware is made from high-quality, durable metals (mostly forged brass and cast bronze) and is highly customizable, design-driven, and constructed with superior craftsmanship. Smart locks are an increasingly popular type of digital lock that can be operated and monitored remotely via a wireless connection to another electronic device, such as a smartphone or smart speaker.
ASSA ABLOY AB is a publicly traded Swedish corporation headquartered in Stockholm, Sweden. It sells its home door hardware products in the United States under the August, EMTEK and Yale brands. ASSA ABLOY’s revenues were approximately $9.1 billion in 2021.
Spectrum Brands Holdings Inc. is a publicly traded Delaware company based in Middleton, Wisconsin. It sells its home hardware products in the United States under the Baldwin and Kwikset brands. Spectrum’s revenues were approximately $4.6 billion in 2021.