The Federal Trade Commission is seeking to stop Edgewell Personal Care Co., manufacturer of Schick and Wilkinson Sword razors, from acquiring its competitor in the shaving industry, Harry’s Inc.
The companies had announced the proposed $1.37 billion deal last May.
Edgewell is headquartered on Research Drive in Shelton, and also has operations on Leighton Road in Milford and around the globe.
The FTC on Monday said it has issued an administrative complaint and authorized staff of its Bureau of Competition to file litigation seeking to block the acquisition.
The bureau will seek a temporary restraining order and preliminary injunction in U.S. District Court for the District of Columbia. According to the FTC, this move is aimed at maintaining the status quo until the court can host an administrative trial on the issue, currently scheduled for June 30.
The FTC asserts any such merger would “eliminate competition,” and therefore negatively impact razor prices for consumers. It also asserted that past rivalry between the companies has “spurred innovation.”
“The loss of Harry’s as an independent competitor would remove a critical disruptive rival that has driven down prices and spurred innovation in an industry that was previously dominated by two main suppliers, one of whom is the acquirer,” the FTC said in a press release.
Daniel Francis, deputy director of the FTC’s Bureau of Competition, called Harry’s a “disruptive competitor in the wet shave market.”
“It has forced its rivals to offer lower prices, and more options, to consumers across the country,” Francis said. “Edgewell’s effort to short-circuit competition by buying up its newer rival promises serious harm to consumers.”
The FTC asserted that Edgewell and rival Procter & Gamble, which owns Gillette razor brands, instituted annual price increases not driven by any changes in cost or demand.
When Harry’s emerged with more affordable options and its wet shave brand, both Edgewell and Procter & Gamble had to reduce prices and develop new products, according to the FTC.
The FTC asserts that if Harry’s is under Edgewell’s control, the competition among suppliers of wet shave razors would be sharply curtailed, to the detriment of consumers.
Representatives from both Edgewell and Harry’s issued statements in a news release following the FTC’s announcement.
Rod Little, President and CEO of Edgewell, said, “We continue to believe the combination of our two companies would bring together complementary capabilities for the benefit of all stakeholders, including customers. We will review the FTC’s decision and respond in due course.”
Jeff Raider and Andy Katz-Mayfield, co-founders and co-CEOs of Harry’s, issued the following joint statement: “We are disappointed that the FTC is attempting to block our combination with Edgewell and are evaluating the best path forward. We believe strongly that the combined company will deliver exceptional brands and products at a great value and are determined to bring those benefits to consumers.”
When the companies first announced the deal, they had anticipated it closing in the first quarter of 2020.
Raider and Katz-Mayfield launched the Harry’s brand under the slogan, “You deserve a great shave at a fair price.”
Contact Michelle Tuccitto Sullo at msullo@newhavenbiz.com.
