Schick owner drops purchase of Harry's
Posted February 10, 2020 2:58 p.m. EST
CNN — Harry's Razors was about to be swallowed up by one its larger rivals. But on Monday, the purchase was suddenly dropped.
Edgewell Personal Care, which owns both Wilkinson Sword and Schick, said Monday it is no longer pursuing the $1.4 billion deal to buy the company that made cheaper razors. The move comes a week after the Federal Trade Commission filed a lawsuit to block the purchase, claiming the combination would eliminate competition.
In a press release, Edgewell said the FTC's lawsuit had "no merit," but fighting the decision would be too costly and time consuming.
"After extensive consideration and discussion, and given the inherent uncertainty of a potential trial, the required investment of resources and time and the distraction that a continuing court battle would entail, we determined that proceeding with our standalone strategy is the best course of action for Edgewell and our shareholders," Rod Little, Edgewell's CEO, said in the release.
Harry's cofounders and co-CEO's, Jeff Raider and Andy Katz-Mayfield, also responded in a statement to the dropped deal.
"We continue to be perplexed by the FTC's process and disregard of the facts," the two said. "We know the merger would have benefited consumers greatly. We believe we would have prevailed in litigation, and are disappointed by the decision by Edgewell's board not to see this process to its conclusion."
Harry's was founded in 2012 and expanded into women's products in 2018. In its statement Monday, the company said it is growing, profitable and "excited about the opportunities ahead for our business."
The FTC previously said in its reasoning that Harry's is an independent competitor and its loss "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 agency also said Harry's has lowered prices on products produced by Edgewell and P&G, providing "significant benefits" for consumers.
News of the sunken deal sent shares of Edgewell 25% higher. The gains wiped away its year-to-date losses and shares are now up 23% for the year.
Harry's rivals have been bought by larger companies in the past few years. Dollar Shave Club was purchased for a reported $1 billion in 2016 by Unilever. And Walker & Co. — a direct-to-consumer grooming and beauty products company that makes products for people of color — was acquired by Procter & Gamble in 2018 for an undisclosed amount.