Bloomberg Law
Feb. 3, 2020, 5:12 PM

U.S. Moves to Block Schick Maker Edgewell’s Deal for Harry’s (1)

David McLaughlin
David McLaughlin
Bloomberg News
Gerald Porter Jr.
Gerald Porter Jr.
Bloomberg News

U.S. antitrust officials are suing to block Edgewell Personal Care Co.’s $1.4 billion deal for Harry’s Inc., putting in jeopardy Edgewell’s plans to revamp its nearly 100-year-old Schick razor brand.

The Federal Trade Commission said Monday that it would file a complaint in federal court to stop the acquisition on antitrust grounds, saying the tie-up will eliminate competition between the two razor makers.

“Harry’s is a uniquely disruptive competitor in the wet shave market, and it has forced its rivals to offer lower prices, and more options, to consumers across the country,” Daniel Francis, a deputy director in the agency’s competition bureau said in a statement. “Edgewell’s effort to short-circuit competition by buying up its newer rival promises serious harm to consumers.”

Edgewell agreed to buy Harry’s in May to access the direct-to-consumer model that’s shaking up industries from toothbrushes to socks by introducing new brands online, circumventing traditional retail. The company, which also owns Edge shaving products and Banana Boat, is trying to revive lagging sales after years of grueling competition in an industry dominated by Procter & Gamble Co.’s Gillette.

Edgewell shares rose as much as 9.6% to $28.29, the most in about a year. Trading volume spiked to more than 15 times the 20-day average for this time of day. Investors had not been impressed by the tie-up when it was initially announced, sending the stock tanking by as much as 18%.

The FTC said Edgewell and Procter & Gamble for years operated their respective Schick and Gillette brands of men’s razors as a “comfortable duopoly” with annual price increases not driven by changes in costs or demand. As a result of Harry’s entering the market, Procter & Gamble and Edgewell were forced to reduce prices and develop new products.

“We are disappointed that the FTC is attempting to block our combination with Edgewell, and are evaluating the best path forward,” Harry’s co-founders Jeff Raider and Andy Katz-Mayfield said in a statement.

Edgewell’s President and Chief Executive Officer Rod Little said the company will review the FTC’s decision and respond in due course, according to the statement.

Harry’s Upended the Razor Market. Now It Has to Save Schick

The FTC’s lawsuit presents an added hurdle to Edgewell’s turnaround plan for its grooming business. Ahead of the deal’s expected closure early this year, Bloomberg News reported that Harry’s co-founders Raider and Katz-Mayfield would lead its parent company’s North American operations.

Deals like the Harry’s-Edgewell merger are becoming more common in the consumer goods space, particularly in the grooming category as companies seek to revive legacy brands. Last month, P&G agreed to buy Billie Inc., a subscription-based female body care company, after announcing a merger with Walker & Co. Brands Inc., the owner of male grooming business Bevel, in December 2018. Anglo-Dutch giant Unilever agreed to acquire Dollar Shave Club in 2016.

(Updates with shares, background from fifth paragraph.)

To contact the reporters on this story:
David McLaughlin in Washington at;
Gerald Porter Jr. in New York at

To contact the editors responsible for this story:
Sara Forden at

Sally Bakewell

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