Edgewell Soars After Dropping Bid for Harry's on FTC Opposition

Edgewell will continue operating as a standalone company following the FTC's opposition to its $1.37 billion acquisition of Harry’s Inc.
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Shaving and personal care product maker Edgewell Personal Care (EPC) - Get Report announced it intends to continue operating as a standalone company following the Federal Trade Commission’s opposition to its $1.37 billion acquisition of Harry’s Inc.

Harry’s informed Edgewell that it plans to pursue litigation to force the FTC to reverse its ruling. Edgewell said that it believes the FTC litigation "has no merit” and doesn't agree with the regulator’s decision.

Edgewell shares jumped 20.78% to $36.82 in trading Monday.

"We are disappointed by the FTC's decision and continue to disagree with its position," said Rod Little, Edgewell's president and CEO. "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."

Last week, the FTC filed a complaint alleging that the Edgewell-Harry's combination would eliminate “one of the most important competitive forces in the shaving industry."

Edgewell, which owns razor brands Schick and Wilkinson, announced last May that it was purchasing Harry’s in a cash-and-stock deal. The global men’s grooming industry is expected to hit $78.6 billion by 2023 from $57.7 billion in 2017, according to a ResearchAndMarkets.com report.

The FTC called Harry’s Edgewell’s “key competitor” along with market leader Procter & Gamble (PG) - Get Report in its letter announcing the lawsuit. 

Separately, Edgewell announced first-quarter net sales of $454 million with adjusted earnings of 55 cents a share. Wall Street was expecting revenue of $445.9 million with earnings of 29 cents.

Edgewell shares jumped 20.78% to $36.82 in trading Monday.