ASSA ABLOY put its Yale and Emtek brands on the selling block as it seeks to reverse U.S. antitrust opposition over its intent to acquire Spectrum Brands’ Hardware and Home Improvement (HHI) division.
In September, ASSA ABLOY said it had signed an agreement to acquire the HHI division for $4.3 billion. On Sept. 15, the U.S. Department of Justice’s Anti-Trust Division sued the Sweden-based company to stop the sale, contending that Spectrum Brands is ASSA ABLOY’s largest competitor in supplying the $2.4 billion residential door hardware industry in the U.S.
ASSA ABLOY stated on Oct. 14 it initiated a sales process of Emtek and the Yale smart residential business in the U.S. and Canada as part of a formal response to the DOJ’s attempt to block the HHI acquisition. The Emtek and Yale businesses represented sales of about $350 million 2021. Residential businesses outside of the U.S. and Canada are not part of the planned divestiture, according to the announcement.
The proposed divestitures are dependent on ASSA ABLOY and Spectrum Brands successful defense against the DOJ regarding the planned acquisition of HHI.
“We believe strongly in the acquisition of HHI as we together will increase investments in the residential segments and strengthen our combined product offering for the benefit of consumers. The proposed remedies eliminate all competitive concerns alleged by the DOJ,” said Nico Delvaux, president and CEO of ASSA ABLOY.
Spectrum Brands also filed a formal response to the DOJ’s complaint to block the sale of its HHI division, stating “there is no basis in law or in fact for the DOJ’s meritless claims.”
“In essence, the Government is attempting to circumvent decades of established practice and merger case law precedent,” Spectrum Brands said in its answer filed in federal court.
The DOJ’s complaint, filed in the U.S. District Court for the District of Columbia, alleges that the merger would eliminate important head-to-head competition between ASSA ABLOY and Spectrum, risking higher prices, lower quality, reduced innovation and poorer service in the sale of at least two types of residential door hardware: premium mechanical door hardware and smart locks.
Spectrum Brands and ASSA ABLOY said they remain committed to completing the transaction and are confident that they will prevail in litigation.