FTC Seeks to Block Edgewell, Harry’s Deal

● The Federal Trade Commission says the deal could eliminate competition in the shaving industry.

The Federal Trade Commission is filing a suit to block Edgewell Personal Care Co.’s proposed $1.37 billion acquisition of Harry’s Inc., saying the deal would eliminate “one of the most important competitive forces in the shaving industry.”

The FTC issued a statement on Monday saying it had authorized staff of the Bureau of Competition to file a suit that would enjoin the deal pending a trial.

“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 statement.

“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,” said Daniel Francis, deputy director of the FTC’s bureau of competition, in a statement.

In the complaint, the FTC alleges that for many years Edgewell and

P&G ran their razor businesses “as a comfortable duopoly characterized by annual price increases that were not driven by changes in cost or demand.”

Edgewell and Harry’s unveiled a $1.37 billion deal in May with plans to create a “next generation consumer products platform.” Harry’s launched as a directto- consumer razor business for men in 2012, and gradually took the brand into retail. In 2018, the company launched Flamingo, a women’s personal- care business, that followed Billie, another women’s- oriented shaving start-up.

In January, P&G inked a deal to buy Billie for an undisclosed amount. That deal has not yet closed, and a spokeswoman for P&G said the company is in the early stage of regulatory approval for the deal. P&G’s chief financial officer Jon Moeller recently said the company’s existing grooming portfolio had been able to “price behind innovation” and that

“as long as that creates performance value for consumers and stays within reasonable [prices] versus competitive offerings, [P&G] can do that pretty successfully.”

Edgewell and P&G aren’t the only companies trying to freshen up their grooming portfolios. In 2016, Unilever bought Dollar Shave Club for a reported $1 billion.

Edgewell and Harry’s released a statement on Monday in support of the deal. “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,” said Edgewell president and chief executive officer.

Harry’s cofounders and co- ceo’s

Jeff Raider and Andy Katz-Mayfield released a statement saying they were “disappointed” in the FTC’s move and that they believe “the combined company will deliver exceptional brands and products at a great value.”