PG Procter and Gamble Co

By Chris Wack

The Federal Trade Commission said Monday it authorized the Bureau of Competition to file suit to enjoin Edgewell Personal Care Co.'s (EPC) proposed $1.37 billion acquisition of its key competitor, Harry's Inc.

The FTC said its complaint alleges that the proposed combination would eliminate one of the most important competitive forces in the shaving industry, and 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 has issued an administrative complaint, and has also authorized staff to file a complaint requesting a temporary restraining order and a preliminary injunction in the U.S. District Court for the District of Columbia to maintain the status quo pending a trial.

The FTC's complaint alleges that for many years, Edgewell and Procter & Gamble (PG) operated their respective Schick and Gillette brands of men's razors and Intuition/Hydro Silk and Venus brands of women's razors, as a duopoly characterized by annual price increases that weren't driven by changes in costs or demand.

After Harry's launched in 2016, the complaint says, Procter & Gamble and Edgewell reduced prices and developed previously unavailable value-priced products, generating significant benefits for consumers.

By bringing the disruptive Harry's under Edgewell's control, the complaint alleges, the proposed acquisition would eliminate important and growing competition among suppliers of wet shave razors, and would inflict significant harm on consumers of razors across the U.S.

The commission vote to issue the administrative complaint and to authorize staff to seek a temporary restraining order and preliminary injunction was 5-0. The administrative trial is scheduled to begin June 30, 2020.

Edgewell Personal Care shares rose 8% to $27.93 in early trading.

Write to Chris Wack at chris.wack@wsj.com

(END) Dow Jones Newswires

February 03, 2020 10:15 ET (15:15 GMT)

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