Harry’s to sue Shelton firm

Facing a rough patch in the face of federal antitrust opposition, Edgewell Personal Care is walking away from its proposed acquisition of Harry’s, which notified Sheltonbased Edgewell it will sue.

The Federal Trade Commission filed suit last week to block the $1.4 billion merger, arguing New York City-based Harry’s has proven an effective foil in getting Edgewell and Procter & Gamble to cut prices on their respective Schick and Gillette razor blades, benefiting consumers.

“We’re obviously disappointed by the FTC’s decision to seek to block the proposed transaction with Harry’s and we continue to disagree with the merits of their position,” said Edgewell CEO Rod Little, during a Monday morning conference call with investment analysts. “That said, given the ongoing uncertainty about the potential outcome and the required investment in resources, time and resulting distraction to our business a continuing legal battle with the FTC would entail, ... we have terminated the merger agreement.”

Under the original acquisition agreement, Edgwell was allowed to terminate the deal without penalty, and set out certain conditions under which it would be compelled to oppose any attempt by a government authority to block the merger. Little told analysts on Monday any litigation “has no merit” that Harry’s may file, declining to go into details.

Little’s Edgewell team spent more than $5 million last year putting the Harry’s deal together, representing only a drop of red ink in a year in which losses totaled $372 million. Edgewell had seen Harry’s as one foundation for a turnaround, five years after Edgewell was created in a split from battery giant Energizer Holdings.

In the first three months of its 2020 fiscal year, Edgewell reported a $22 million profit, with sales down slightly from a year ago to $454 million.

Edgewell generates about 60 percent of its sales from its shaving brands that include Schick and Wilkinson Sword, with the company also making blades for sale by other companies under their own brands. Other Edgewell products include Hawaiian Tropic and Banana Boat sun lotions, and Playtex, Carefree and Stayfree feminine care products.

Last year, Edgewell sold its Diaper Genie and Litter Genie disposable product lines to a Canadian company for $123 million.

Besides Gillette and Harry’s, other Schick and Wilkinson Sword competitors include Bic, which has its North American headquarters across the street from Edgewell in Shelton; and Unilever with its Dollar Shave Club subscription service. In the market for “private label” razors manufactured for sale under other company’s brands, Edgewell has another major competitor in South Korea-based Dorco.