Tempur Sealy announces name change to Somnigroup after Mattress Firm acquisition finally closes

Kentucky, US – Tempur Sealy’s acquisition of retail chain Mattress Firm has finally completed. It has also announced plans to change its name to Somnigroup International, with Tempur Sealy, Mattress Firm and UK retailer/manufacturer Dreams operating as decentralised business units. Mattress Firm and Dreams will continue to sell multiple brands of mattress. Tempur Sealy will still sell mattresses through third-party retailers, in addition to via Mattress Firm, Dreams and its direct-to-consumer channel.

“We are now the world’s largest bedding company, with superior capabilities in design, manufacturing, distribution and retail, while also owning the portfolio of the most highly recognised brands in the industry,” CEO Scott Thompson told a post-closing analyst call.

Plans for the acquisition were first announced 21 months ago in May 2023, but it was held up by regulatory and competition concerns. The company had been hoping the transaction would close before the end of 2024.

The closure of the $5bn cash-and-shares deal was made possible after the US District Court for the Southern District of Texas denied the Federal Trade Commission’s motion for a preliminary injunction to halt it. FTC has said it will not seek emergency relief from the Fifth Circuit, and it will not prevent the transaction from closing.

In the intervening time, Tempur Sealy has been negotiating future relationships with other mattress manufacturers whose products feature in Mattress Firm stores. These include Purple, where the agreement was accompanied by the settling of several intellectual property disputes.

Half a dozen post-closing supply agreements with third-party mattress manufacturers are already in place. These do not include Serta Simmons, Thompson said, other than its existing agreement with Mattress Firm. “I’m sure we will be talking to them at some later date on that,” he said.

The focus of the litigation that held up the deal was on the luxury end of the market. It has committed that a dozen of the 30 or so luxury products in store will be third-party mattresses, rather than products from Tempur Sealy or Mattress Firm’s own brand, Sleepy’s.

The company had previously announced that, on completion, it would sell 73 Mattress Firm retail locations and its own Sleep Outfitter subsidiary, which includes 103 specialty mattress retail locations and seven distribution centres, to Mattress Warehouse. This is expected to close in the second quarter of 2025.

“This transaction accelerates our transformation from being a pure manufacturer to a vertically integrated omnichannel retailer and significantly improves our competitive position around the world,” Thompson said. “[It] brings us closer to the end consumer, giving us the capabilities to develop better products and ensure our innovation pipeline is on track.”