WASHINGTON (Reuters) – The U.S. Department of Justice has filed a lawsuit to block a proposed $4.3 billion deal by Assa Abloy (OTC:AB) to buy a division of Spectrum Brands Holdings (NYSE:) Inc that makes residential door hardware, the department said in a statement. On Thursday, the deal could lead to higher prices for consumers.
The management said the merger of Assa Abloy and Spectrum’s hardware and home improvement division could mean higher prices and less innovation for homeowners who want to purchase premium mechanical door hardware or smart locks.
Sweden’s Assa Abloy makes the Yale, August and EMTEK brands, while the Spectrum division makes the Baldwin and Kwikset brands.
“The competition between these two companies, two of the three largest companies in an already concentrated industry, has benefited American consumers in the form of lower prices and better quality,” said Assistant Attorney General Jonathan Kanter of the Department of Justice’s Antitrust Division. statement.
Management said the deal, if it goes ahead, would give Assa Abloy a near-monopoly in high-quality mechanical door hardware and more than half the market for smart locks, a rapidly growing market.
The companies said in a statement that they “strongly disagree with the Department of Justice’s characterization of the proposed transaction, and will vigorously challenge” the government’s lawsuit to halt the deal, which was announced in September 2021.
The deal is one of a growing number of deals that have faced legal challenge from the Department of Justice whose leaders have argued that antitrust laws have not been sufficiently enforced. The ministry filed acquisition lawsuits in books, insurance, sugar production, and the defense industry.
The complaint was filed in the US District Court for the District of Columbia.