FTC Finds Merger to Be Suitable

Updated May 30, 2014 2:18 p.m. ET

The Federal Trade Commission on Friday granted antitrust clearance to the planned tie-up of suit sellers


Men’s Wearhouse Inc.



MW +4.06%



Men’s Wearhouse Inc.


U.S.: NYSE


$50.22


+1.96
+4.06%



May 30, 2014 2:43 pm

Volume (Delayed 15m)
:
1.48M




P/E Ratio
30.06

Market Cap
$2.31 Billion


Dividend Yield
1.43%

Rev. per Employee
$135,892









05/30/14 FTC Approves Merger Between Me…
04/25/14 Dealpolitik: How Corporate Tec…
04/18/14 Dealpolitik: How Jos. A. Bank’…
More quote details and news »



and


Jos A. Bank



JOSB +1.34%



Jos. A. Bank Clothiers Inc.


U.S.: Nasdaq


$64.96


+0.86
+1.34%



May 30, 2014 2:40 pm

Volume (Delayed 15m)
:
2.49M




P/E Ratio
28.61

Market Cap
$1.79 Billion


Dividend Yield
N/A

Rev. per Employee
$159,556









05/30/14 FTC Approves Merger Between Me…
04/10/14 Men’s Wearhouse Again Extends …
03/31/14 Buyers Are Enjoying a Deals Bo…
More quote details and news »



Clothiers Inc., saying the deal is unlikely to harm consumers.

The commission had been conducting a detailed review of the proposed $1.8 billion deal. It sent letters to lawyers for both companies informing them that the agency was closing its investigation without taking action against the transaction.

Commission officials said in a written statement that they allowed the deal after concluding the companies faced “significant competition from other sources.” The FTC also said the two firms had different product assortments that reflected their different customer bases.

The Wall Street Journal reported earlier Friday that the FTC was close to giving its antitrust blessing to the deal.

While there is no shortage of retailers that sell suits, the plan by Men’s Wearhouse to acquire Jos. A. Bank prompted antitrust questions in part because of some unusual posturing by both firms before a merger agreement. The companies highlighted antitrust issues themselves during a contentious courtship process in which each criticized takeover efforts by the other.

In rejecting a Jos. A. Bank bid last year as inadequate, Men’s Wearhouse said a merger “could raise significant antitrust concerns.” Jos. A. Bank threw those words back at its rival in February and said the FTC had taken “a very serious step” by requesting detailed information about a proposed acquisition by Men’s Wearhouse. While the two men’s retailers are competitors, a large volume of suits in the U.S. are sold by department stores such as Macy’s Inc., Nordstrom Inc. and J.C. Penney Co.

Observers have said that such strongly worded exchanges by companies during deal negotiations can be more rhetoric than substance and don’t necessarily indicate that a merger poses a threat to competition.

The FTC began analyzing a possible marriage of the two companies even before they agreed in March to combine. The commission said Friday that it examined how the transaction would affect both the retail sale of men’s suits, as well as tuxedo rentals.

The often contentious deal battle kicked off in October, when news of Jos. A. Bank’s approach to buy Men’s Wearhouse became public. Men’s Wearhouse wasn’t on Jos. A. Bank’s target list until the summer of 2013, when Men’s Wearhouse ousted its founder and Chairman

George Zimmer

in a public boardroom spat. The approach caused an unusual deals dance where Men’s Wearhouse in turn offered to buy Jos. A. Bank, with each side making additional bids to buy each other.

While the negotiations made for good theater, analysts and deal watchers alike said a pair-up made sense. The combined company would receive significant cost savings from back office operations, advertising spending, as well as more leverage with suppliers, people said.

A spokesman for Jos. A. Bank declined to comment. A Men’s Wearhouse spokesman couldn’t immediately be reached for comment.

Write to Brent Kendall at brent.kendall@wsj.com and Dana Mattioli at dana.mattioli@wsj.com

  Click to listen highlighted text! Updated May 30, 2014 2:18 p.m. ET The Federal Trade Commission on Friday granted antitrust clearance to the planned tie-up of suit sellers Men’s Wearhouse Inc. MW +4.06% Men’s Wearhouse Inc. U.S.: NYSE $50.22 +1.96 +4.06% May 30, 2014 2:43 pm Volume (Delayed 15m) : 1.48M P/E Ratio 30.06 Market Cap $2.31 Billion Dividend Yield 1.43% Rev. per Employee $135,892 05/30/14 FTC Approves Merger Between Me… 04/25/14 Dealpolitik: How Corporate Tec… 04/18/14 Dealpolitik: How Jos. A. Bank’… More quote details and news » and Jos A. Bank JOSB +1.34% Jos. A. Bank Clothiers Inc. U.S.: Nasdaq $64.96 +0.86 +1.34% May 30, 2014 2:40 pm Volume (Delayed 15m) : 2.49M P/E Ratio 28.61 Market Cap $1.79 Billion Dividend Yield N/A Rev. per Employee $159,556 05/30/14 FTC Approves Merger Between Me… 04/10/14 Men’s Wearhouse Again Extends … 03/31/14 Buyers Are Enjoying a Deals Bo… More quote details and news » Clothiers Inc., saying the deal is unlikely to harm consumers. The commission had been conducting a detailed review of the proposed $1.8 billion deal. It sent letters to lawyers for both companies informing them that the agency was closing its investigation without taking action against the transaction. Commission officials said in a written statement that they allowed the deal after concluding the companies faced “significant competition from other sources.” The FTC also said the two firms had different product assortments that reflected their different customer bases. The Wall Street Journal reported earlier Friday that the FTC was close to giving its antitrust blessing to the deal. While there is no shortage of retailers that sell suits, the plan by Men’s Wearhouse to acquire Jos. A. Bank prompted antitrust questions in part because of some unusual posturing by both firms before a merger agreement. The companies highlighted antitrust issues themselves during a contentious courtship process in which each criticized takeover efforts by the other. In rejecting a Jos. A. Bank bid last year as inadequate, Men’s Wearhouse said a merger “could raise significant antitrust concerns.” Jos. A. Bank threw those words back at its rival in February and said the FTC had taken “a very serious step” by requesting detailed information about a proposed acquisition by Men’s Wearhouse. While the two men’s retailers are competitors, a large volume of suits in the U.S. are sold by department stores such as Macy’s Inc., Nordstrom Inc. and J.C. Penney Co. Observers have said that such strongly worded exchanges by companies during deal negotiations can be more rhetoric than substance and don’t necessarily indicate that a merger poses a threat to competition. The FTC began analyzing a possible marriage of the two companies even before they agreed in March to combine. The commission said Friday that it examined how the transaction would affect both the retail sale of men’s suits, as well as tuxedo rentals. The often contentious deal battle kicked off in October, when news of Jos. A. Bank’s approach to buy Men’s Wearhouse became public. Men’s Wearhouse wasn’t on Jos. A. Bank’s target list until the summer of 2013, when Men’s Wearhouse ousted its founder and Chairman George Zimmer in a public boardroom spat. The approach caused an unusual deals dance where Men’s Wearhouse in turn offered to buy Jos. A. Bank, with each side making additional bids to buy each other. While the negotiations made for good theater, analysts and deal watchers alike said a pair-up made sense. The combined company would receive significant cost savings from back office operations, advertising spending, as well as more leverage with suppliers, people said. A spokesman for Jos. A. Bank declined to comment. A Men’s Wearhouse spokesman couldn’t immediately be reached for comment. Write to Brent Kendall at brent.kendall@wsj.com and Dana Mattioli at dana.mattioli@wsj.com Powered By GSpeech