ASSA ABLOY has formally responded to the U.S. Department of Justice’s (DOJ) civil antitrust lawsuit seeking to block the company’s proposed $4.3 billion acquisition of the Hardware and Home Improvement (HHI) division of Spectrum Brands Holdings Inc.

The DOJ complaint, filed in the U.S. District Court for the District of Columbia, alleges that the merger would eliminate head-to-head competition between ASSA ABLOY and Spectrum. That could in turn risk higher prices, lower quality, reduced innovation and poorer service with respect to the sale of 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,” says assistant attorney general Jonathan Kanter of the Justice Department’s Antitrust Division. “Competition between these two companies, which are two of the three largest companies in an already concentrated industry, has benefitted American consumers in the form of lower prices and better quality. That important competition would be extinguished if this merger were allowed to proceed to the detriment of Americans.”

On Friday, Oct. 14, ASSA ABLOY announced its plan to “fully resolve” the alleged competitive concerns addressed by the DOJ in its complaint. The complaint seeks to enjoin the transaction under Section 7 of the Clayton Act, and alleges that ASSA ABLOY and Spectrum have competed for years to be leaders in the U.S. markets for premium mechanical door hardware and for smart locks.

“ASSA ABLOY has initiated a sales process of Emtek and the Smart Residential business in the U.S. and Canada,” ASSA ABLOY says. “These businesses represented sales of about MUSD 350 in 2021. Residential businesses outside of the U.S. and Canada are not in scope to be divested.”

The proposed divestitures are dependent on the company’s defense against the DOJ regarding the acquisition.

“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,” says Nico Delvaux, president and CEO of ASSA ABLOY. “The proposed remedies eliminate all competitive concerns alleged by the DOJ.”

According to a Department of Justice news release, ASSA ABLOY and Spectrum are two of the three largest producers of residential door hardware in the $2.4 billion U.S. industry. ASSA ABLOY is a publicly traded Swedish stock company headquartered in Sweden. It sells its residential 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 corporation headquartered in Wisconsin. It sells its residential hardware products in the United States under the Baldwin and Kwikset brands. Spectrum’s revenues were approximately $4.6 billion in 2021.

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