The U.S. Department of Justice (DOJ) has announced that it will seek to block Assa Abloy´s proposed acquisition of the HHI division of Spectrum Brands. Assa Abloy and Spectrum Brands strongly disagree with the Department of Justice’s characterisation of the proposed transaction, and will vigorously contest in court this effort by the DOJ to oppose the transaction.
On September 8, 2021, Assa Abloy announced it had signed an agreement to acquire the HHI division of Spectrum Brands for a purchase price of MUSD 4,300 on a cash and debt free basis.
“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.
This transaction will bring together Assa Abloy’s strength in access solutions and HHI’s complementary deep talent and experience base in residential products, which will be enhanced by Assa Abloy’s culture of driving technology and innovation. Assa Abloy and Spectrum Brands are convinced that the transaction will accelerate innovation and deliver significant benefits to consumers, and refute any suggestion that the proposed transaction would harm competition.
Spectrum brands has released a statement also confirming that the organisation will strongly opposed the move by the DoJ. According to the company, with Assa Abloy as owner, HHI will be able to keep up with the fierce competition across today’s home security marketplace and bring consumers better innovation and product choice. The transaction will also simplify the Spectrum Brands business and advance its strategic objective of creating a pure-play Global Pet Care and Home & Garden company, allowing management to devote resources and to prioritise innovation in those units in order to accelerate long-term sustainable growth.
According to Spectrum Brands, the DOJ’s lawsuit challenging the transaction ignores the realities of this dynamic industry and the highly competitive landscape of the residential security marketplace, in which there are many capable and vigorous competitors and rapid, easy entry by new firms. This transaction will only further increase HHI’s ability to deliver the innovations consumers demand. The combined entity will deliver more value and innovation to customers and enhance competition overall in an ever-changing marketplace.
David Maura, the Company’s Chief Executive Officer, said, “despite disagreeing strongly with the DOJ’s purported concerns, in the spirit of compromise – and to speed delivery of the concrete benefits this transaction offers all stakeholders – Spectrum Brands and Assa Abloy made numerous proposals to address the DOJ’s concerns, each of which were rejected without a valid basis. Their choice to pursue litigation places political ideology above the interests of American consumers and workers. We are confident that the Court will agree with us and will allow us to close the transaction.”
Assa Abloy and Spectrum Brands remain confident in the merits of this transaction and will jointly defend it. Assa Abloy and Spectrum Brands are committed to completing the transaction and are confident that they will prevail in litigation.
As previously disclosed, Assa Abloy and Spectrum Brands have agreed to extend their agreement for Assa Abloy to acquire HHI to June 30, 2023.