ASSA ABLOY completes sale of Emtek and Smart Residential toward HHI acquisition

YARMOUTH, Maine – On Dec. 2 ASSA ABLOY announced that it has entered into binding agreements with Fortune Brands Home & Security with regard to the sale of its Emtek and Smart Residential businesses.

Following ASSA ABLOY’s bid to acquire Spectrum Brands HHI (Home and Hardware Improvement) division, the U.S. Department of Justice (DoJ) filed an antitrust lawsuit to block it on Sept. 15, 2022. As part of efforts to clear a path for the acquisition ASSA ABLOY moved to divest itself of Emtek and Smart Residential on Oct. 14, proposing that the sale of the two companies should eliminate the concerns alleged by the DoJ. ASSA ABLOY noted that businesses outside of the U.S. and Canada are not in scope to be divested.

"With Fortune Brands, our excellent U.S. and Canadian residential businesses will get a good and strong home with an experienced owner,” said Nico Delvaux, president and CEO of ASSA ABLOY. “While keeping these residential businesses in the U.S. and Canada would have been preferred, we are confident that we have now fully eliminated all competitive concerns alleged by the DoJ and that the acquisition of HHI is in the long-term interest of our shareholders.”

Both businesses represented sales of about $350 million in 2021. The sale price is $800 million on a cash and debt-free basis. Divestiture of Emtek and Smart Residential is contingent on the successful defense against the DoJ in their lawsuit against ASSA ABLOY. Until such a time ASSA ABLOY has stated that it remains fully committed to both businesses and that operations will continue as normal.

Both the HHI acquisition and the divestiture of the businesses are expected to close in the second quarter of 2023 provided a successful defense against the DoJ lawsuit. “Competition between these two companies, which are two of the three largest companies in an already concentrated industry, has benefited American consumers in the form of lower prices and better quality,” Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division said in September. “That important competition would be extinguished if this merger were allowed to proceed to the detriment of Americans.”