JHVEPhoto/iStock Editorial via Getty Images
spectrum brands (New York Stock Exchange: SPB) jumped 13% After hours of deliberation after reaching a settlement with the Department of Justice regarding Assay Abloy’s planned acquisition of a door hardware unit. The settlement puts an end to the court proceedings in US District Court for the District of Columbia.
Spectrum Brands (SPB) has approved a Conditioning with the Ministry of Justice to settle the DOJ’s challenge to acquire Assa Abloy the company’s hardware and home improvement business, according to a statement released Friday.
The Justice Department sued to block the Swedish company from acquiring the door hardware unit for $4.3 billion from Spectrum Brands (SPB) back in September. Shares of Spectrum Brands rose 27% on Dec. 2 after Assa announced an agreement to sell some assets to Fortune Brands Home & Security (FBIN) for $800 million to try to address DOJ concerns.
In connection with the settlement and according to the proposed final judgment submitted to the court on Friday, Assa Abloy will continue to divest Emtek and Smart Residential Business investments in the United States and Canada to Fortune Brands.
“We are very pleased to have reached an agreement with the Department of Justice, which is a significant milestone toward placing HHI in the hands of Assa Abloy, who we believe will enhance HHI’s ability to offer consumers better innovation and product choice,” Spectrum Brands (SPB) CEO David Mora said in the statement. .
The settlement comes after a DOJ trial to block the sale of the door hardware unit began April 24, though the trial was postponed twice this week and was due to resume Monday without explanation, sending Spectrum Brands (SPB) shares up 6.4% over the course of the year. last two days.
Approval from the Mexican Competition Authority is the only regulatory approval pending. Spectrum Brands (SPB) continues to expect this transaction to close on or before June 30.
In March, Raymond James analyst Olivia Tong wrote that she expected shares of Spectrum Brand (SPB) to see a “strong” positive reaction should the deal go through.
Chris Demuth Jr., partner at Rangeley Capital, told Search Alpha last month that he sees Spectrum Brands (SPB) rising to $80-90 a share if the deal is allowed to go through.
Fortune Brands (FBIN) announced in a separate statement Friday that it plans to proceed with the acquisition of Emtek and Schaub’s luxury doors, luxury safes, and residential smart home locks in the United States and Canada in Yale and August from Assa Abloy that it originally agreed to purchase in early December. .
For the rest of 2023, Fortune Brands said, the acquisition of the doors and hardware business is expected to result in net sales of $190 million to $210 million and earnings per share of $0.02 to $0.04.