ASSA ABLOY and the United States have come to a “narrow agreement” on a portion of the latter’s lawsuit attempting to block the company’s acquisition of the HHI division of Spectrum Brands. However, the parties in the case told the District Court for the District of Columbia that they remain at odds on a number of other factors.

ASSA ABLOY’s agreement to acquire the HHI division of Spectrum Brands includes a purchase price of $4.3 billion on a cash and debt-free basis. On September 15, 2022, the U.S. Department of Justice (DOJ) blocked the proposed acquisition of HHI over competition concerns. The most recent filing comes approximately one month after the United States asked the court for a 30-day discovery period extension. Since ASSA ABLOY complied with discovery obligations, the court wrote there was “no basis” for the U.S.’ request.

According to court documents filed by ASSA ABLOY at the end of February 2023, the parties have agreed that products sold by defendants in relevant markets include no products other than those placed on a list agreed upon by both parties. Therefore, the company says it is willing to agree to a stipulation regarding the plaintiff’s ability to establish its prima facie case based on market concentration calculations.

“Defendants do not contest that plaintiff could establish a prima facie case for their proposed relevant markets if the market concentration calculations were limited to the transaction and did not account for the divestiture,” ASSA ABLOY writes in court documents.

The defendants also agree that the United States would be permitted to present evidence at trial about the “nature and intensity of existing competition” in relevant markets. However, the company adds that it is “premature” for the court to weigh in on whether such evidence is “relevant or admissible,” reserving the right to object.

The United States tells the court that it believes there are a number of remaining issues needing to be addressed at trial. They include: which specific products are in the relevant product markets; the degree of concentration in the relevant markets; and the nature, extent and intensity of existing competition in those markets, “including whether and to what extent defendants compete with each other in those markets.”

Also needing to be addressed at trial, according to documentation filed by the U.S., is whether the United States can establish a prima facie case other than through market-concentration statistics and whether it can do so without accounting for ASSA ABLOY’s proposed divestiture remedy. That remedy, announced by ASSA ABLOY, is the sale of its Emtek and the Smart Residential businesses.

“Of particular importance, the limited stipulation does not obviate the need to present evidence about the nature and intensity of existing competition,” the plaintiff writes in court documents. “Such evidence is needed to evaluate the adequacy of defendants’ proposed divestiture remedy because any remedy would need to restore the intensity of existing competition that may be lost as a result of the challenged transaction.”