$1.43 billion takeover of shaving brand Harry’s blocked by FTC
Edgewell Personal Care had planned to acquire Harry’s in a $1.43 billion (€1.31 billion) deal, which would have seen the shaving company join brands such as Bulldog Skincare, Hawaiian Tropic and Wilkinson Sword in Edgewell’s portfolio. However, the FTC opposed the deal, suggesting that the merger would eliminate a key competitive force for the industry and “promises serious harm to consumers”.
Daniel Francis, deputy director of the FTC’s Bureau of Competition, said: “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.
“The Harry’s and Flamingo brands represent a significant and growing competitive threat to the two firms that have dominated the wet shaving market for decades. Edgewell’s effort to short-circuit competition by buying up its newer rival promises serious harm to consumers.”
According to the FTC, Edgewell, Harry’s and Procter & Gamble (P&G) are among the few ‘significant’ competitors in the US wet shave razors market. For many years, Edgewell and P&G operated their respective Schick and Gillette brands of men’s razors, and Intuition/Hydro Silk and Venus brands of women’s razors, as a ‘comfortable duopoly’, according to the FTC, characterised by annual price increases that were not driven by changes in costs or demand.
Harry's disrupted the market when it first launched as an online-only, direct-to-consumer wet shave brand, and eventually moved into brick and mortar stores. P&G and Edgewell reduced prices and developed new products, benefiting consumers. The FTC stated that the proposed acquisition of Harry’s by Edgewell would eliminate ‘important and growing’ competition.
The Commission vote to issue the administrative complaint and to authorise staff to seek a temporary restraining order and preliminary injunction was 5-0. The administrative trial is scheduled to begin on 30 June 2020.