The Federal Trade Commission has given the green light to the $1.8 billion Men’s Wearhouse Inc. acquisition of Jos. A. Bank Clothiers Inc.
The FTC issued a letter to both companies’ counsel Friday, saying that it has closed its investigation into the acquisition. In a blog post about that decision, the FTC said that the two businesses had competition in the menswear market from a number of other stores in the same price range, including Macy’s, Kohl’s, JCPenney, Nordstrom and Brooks Brothers.
“Despite limited competition from the Internet, the transaction is not likely to harm consumers because of significant competition from other sources,” said the post by Debbie Feinstein, Alexis Gilman and Melissa Davenport of the FTC’s Bureau of Competition.
They continued: “The two firms also have different product assortments that reflect their different customer bases. Men’s Wearhouse, which sells branded and private-label suits, has a younger, trendier customer set, while Jos. A. Bank, which sells private-label suits only, has an older, more traditional customer base.”
The approval should not come as a surprise to observers, said Robert Barlett, a mergers and acquisitions attorney in the Bethesda office of Offit Kurman, who has been following the menswear merger.
“It was widely known and considered by people familiar with the antitrust approval process that it would be approved,” he said. “Everything I’ve read suggests that Time Warner and Comcast is going to get approved down the line, and that’s certainly more of a monopoly than Men’s Wearhouse and Jos. A. Bank.”
The deal is expected to close within the next 30 days, said Doug Ewert, president and CEO of Men’s Wearhouse in a statement.
“Together, Men’s Wearhouse and Jos. A. Bank will have increased scale and breadth, and Jos. A. Bank’s strong brand and complementary business model will broaden our customer reach,” he said.
The deal between the two companies was the culmination of a months-long tug of war that began with Jos. A. Bank’s unsolicited offer to buy Men’s Wearhouse in the fall. In March, the companies announced that they had reached an agreement, in which the Wearhouse would buy Bank for $65 a share.
While the two brands now express a readiness to combine, both previously expressed concerns about antitrust laws in their public rejections of earlier proposed deals.
“It was just an excuse,” said Barlett. “It’ll just be interesting to see how after all the bad-mouthing and posturing, how the two sides come together.”