Tempur Sealy to acquire Mattress Firm in $4 billion deal

(Reuters) - Tempur Sealy International Inc said on Tuesday it has agreed to acquire mattress retailer Mattress Firm, part-owned by Steinhoff International Holdings NV, in a cash-and-stock transaction valued at around $4.0 billion, as the company looks to grow its store footprint.

Shares of Tempur Sealy fell 9% in premarket trading.

Tempur Sealy will pay around $2.7 billion in cash and $1.3 billion in Tempur stock issued to Mattress Firm shareholders, the companies said. Tempur will issue 34.2 million shares of common stock.

The companies expect the transaction to close in the second half of 2024, after which Mattress Firm would operate as a separate business unit within Tempur Sealy.

The acquisition would add more than 2,300 brick-and-mortar retail locations of Mattress Firm to Tempur, taking the mattress and bedding maker's total stores to about 3,000 globally.

(Reporting by Granth Vanaik and Deborah Sophia in Bengaluru; Editing by Krishna Chandra Eluri)