Roundup: Waking Up To a Big Mattress Merger
Plus: The Big Three telcos stand firm against the CRTC over new wireless fees and the Competition Bureau investigates Canada's food supply chain
The Competition Bureau isn’t taking a $2.5 billion (U.S.) merger between bedding giant SOMNIGROUP INTERNATIONAL and mattress component maker LEGGETT & PLATT lying down, with the enforcement agency adding it to its list of deal reviews.
Kentucky-based Somnigroup, the world’s largest bedding company, announced the all-stock transaction with Missouri-based Leggett & Platt in April. The combined company will operate 175 manufacturing facilities in 36 countries, with 36,000 employees.
“This combination is consistent with our vertical integration strategy, which drives innovation and value for customers while also enhancing shareholder value,” Somnigroup chairman and chief executive Scott Thompson said in a release at the time.
Somnigroup itself is the product of a series of mergers – bed makers Tempur-Pedic and Sealy in 2012, with retailer Mattress Firm added to the mix in 2025. That second deal was challenged by the U.S. Federal Trade Commission on antitrust grounds, but the regulator failed to convince the court that the resulting vertical integration would substantially harm competition.
The company’s influence across the bed industry isn’t sitting well with some retailers, including Nate Cangemi, who owns Golden Dreams Mattress in Carlsbad, Calif. Cangemi has been critical of Somnigroup’s growth in numerous social media posts.
“This level of vertical integration doesn’t just reshape competition, it risks reducing innovation, limiting consumer choice, and destabilizing independent manufacturers who have served our industry for decades,” he wrote on LinkedIn when the Leggett & Platt deal was announced.
“Healthy markets require diversity, transparency, and the ability for smaller, quality-driven companies to compete on merit.”
🎧 ON THE PODCAST THIS WEEK:
How Lobbyists are Neutering Surveillance Pricing Bans
Surveillance pricing is firmly in the public crosshairs, with the federal government this week introducing legislation to govern the controversial practice.
🛒 GROCERIES & RETAIL
If you listened to the above podcast on SURVEILLANCE PRICING, Artificial Intelligence Minister Evan Solomon’s comments on the subject this week following the federal government’s introduction of legislation to address the issue are definitely of interest. “It’s very easy to say just ban using personal information to give personal pricing, because we have to be super careful that we don’t want to penalize people who are members of a rewards program,” he told the Canadian Press. NDP leader Avi Lewis, who is calling on a full ban, pushed back on that, saying that “Minister Solomon’s comments about reward points are a red herring and they echo misleading talking points used by major retailers who are lobbying to stop a ban on surveillance pricing.”
The COMPETITION BUREAU is wasting no time putting its new grocery funding to work, with the enforcement agency this week announcing a new investigation into competition across Canada’s food supply chain. The fact-finding project will focus on three key areas: how food is produced and processed, how it moves to retailers across Canada and retail pricing practices including loyalty programs, pricing algorithms, shrinkflation and skimpflation. The Bureau is seeking input from Canadians and organizations with experience in the food supply chain and is accepting comments until July 31, with a final report scheduled for the spring. Along with the Competition Tribunal, the agency got a new 10-year funding injection of $130 million last week from the federal government to investigate and combat anti-competitive practices in the food industry.
Grocery giant EMPIRE is pushing into so-called discount stores, with a plan to open nearly 100 new locations over the next three years, with three-quarters of those being in the FreshCo brand. The company, which also owns Sobeys and Farm Boy, says the move reflects a growing shift by Canadians toward shopping at stores with cheaper prices. “More than 75 per cent [or our new stores] are going in discount because discount is a white space for us,” chief executive Pierre St-Laurent said during the company’s quarterly earnings call. “We have a lot of room to grow in discount without cannibalization of our network.”
📱 TELECOM
More job cuts at BELL, with the company this week announcing it was axing nearly 700 workers as part of a reorganization effort. The company said back in the fall that it was looking to find $1.5 billion in costs savings by 2028, which suggests that further cuts could be in the offing. The news follows 4,800 positions eliminated in 2024 and 1,300 in 2023. Also this week, Bell announced a deal with COHERE that will see the AI company use its infrastructure and data centres.
It’s a good, old-fashioned Canadian standoff with the nation’s Big Three wireless providers locked in a who-will-blink-first showdown with the CRTC over new fees. Last week, as a new law forbidding wireless service activation and modification fees took effect, the regulator sent letters to TELUS and BELL asking the companies to explain why they felt their respective new “device handling” and SIM card charges weren’t in violation of the Telecommunications Act. The companies this week responded with their own letters, with Telus reiterating its belief that a SIM card (the little plastic chip required to connect a phone to a network) is a product separate from prohibited activation fees. Bell also maintains that its handling fee applies to devices that customers have “explicitly chosen” to buy, so it is therefore exempted under the law. ROGERS, meanwhile, didn’t implement a new fee as fast as its cohorts but made up for lost time by introducing three of them: a $40 for device set-up, $25 for shipping and an unspecified SIM card charge. The CRTC sent Rogers a similar letter, threatening possible regulatory action. Telus did not return a query on whether it’s possible for customers to sign up for wireless service with the company without also getting a SIM card and why it therefore considers that SIM card to be an optional purchase. CRTC spokesperson Mirabella Salem says the letters sent by the regulators are the first step in assessing whether the carriers’ fees are compliant with the new rules. “CRTC staff will consider the explanations provided by Bell, Telus and Rogers and will determine whether further, more formal regulatory action is required to ensure compliance with this consumer protection,” she said.
Hockey Night in Canada is officially leaving CBC starting next season, with NHL rights holder ROGERS moving games exclusively to its own Sportsnet TV channels and streaming service. The cable company first acquired the rights back in 2013 for $5.2 billion, then sub-licensed games to the public broadcaster. But, with Rogers’ new 12-year $11-billion deal beginning next season, the sub-licensing price tag likely got too rich for the CBC, which has been airing hockey games over the air for free for 74 years. While Sportsnet says that CBC hockey viewership is down 70 per cent from 2014, the switch also further cements Rogers’ domination of sports in Canada.
🕺 ENTERTAINMENT
Rupert Murdoch’s FOX is buying ROKU for $22 billion (U.S.) to create the third-largest player in U.S. television by share of viewing, after YouTube and Netflix, according to the two companies. But the deal also gives Fox and entry point into more than 100 million households worldwide via Roku’s streaming devices – set-top boxes, plug-in sticks and integrated televisions – as well the company’s advertising technology, operating system and content discovery tools. Roku’s platform is home to numerous apps that compete with Fox properties, but the company says it plans to continue allowing them.
Movie theatre giant CINEPLEX is raising the price of its CineClub membership program to $10.99 a month, up from $9.99. The change was potentially telegraphed during the company’s recent quarterly earnings call, with chief financial officer Gord Nelson telling analysts that he’s expecting 10- to 15-per-cent box office revenue growth for the remainder of this year, and that “part of this would be pricing.”
Speaking of CINEPLEX, the company could be affected by the latest rumours around NETFLIX reportedly looking to acquire film studio LIONSGATE. The streaming company denies it’s interested, but the studio being in play could affect a deal it signed with Cineplex in 2023. That deal, which The Globe and Mail reported at the time as sending “ripples through [the] Canadian film industry,” moved Cineplex down the road of vertical integration by giving it exclusive distribution rights over Lionsgate’s slate of films, which included the John Wick and Hunger Games franchises.
💾 BIG TECH
If you need a new phone, computer or other gadget, you may want to buy it as soon as possible. APPLE chief executive Tim Cook told The Wall Street Journal this week that imminent price increases for iPhones and other devices are “unavoidable,” thanks to shortages on memory chips that are causing costs to soar. “This is a hundred-year flood,” he told the paper in regards to the cost increases. “I’ve never seen anything like it in any area in over 40 years.” This likely isn’t just an Apple thing, because as the company’s prices go, so too do its competitors’.
The U.S. Federal Trade Commission has drafted a complaint against AMAZON that could lead to a multi-billion-dollar lawsuit against the company over allegations that it misled advertisers, according to a Bloomberg report this week. The regulator and multiple state attorneys general are looking into whether Amazon improperly disclosed ad terms and pricing, particularly with “reserve pricing” or the minimum cost that advertisers must accept before they can buy an ad with the company. Neither the FTC nor Amazon are commenting, but the investigation may wrap up as soon as this summer with either a lawsuit or settlement, according to the report.
Credit card provider AMERICAN EXPRESS is buying online restaurant booking platform TheFork from TRIPADVISOR for $700 million (U.S.), the company announced this week. It’s an odd acquisition on its face, but Amex says that dining is one of the chief avenues for cardholder engagement and TheFork is the leading restaurant reservation platform in Europe, dealing with 50,000 establishments in 11 countries. The credit card company also already owns Resy, a similar reservation platform that caters toward higher-end restaurants in the United States.
🚨 COMING UP
Signing up for a service online is usually really simple, but getting out of it – not so much. Not only does Canada lack protections that allow consumers to easily get out of subscriptions – so-called “click-to-cancel” rules – it’s also behind peer nations in moving to implement them. There’s some light on this horizon, with the CRTC requiring click-to-cancel rules in telecom services starting next year, but other markets are still wide open. TAHIRA DAWOOD, acting general counsel for the Public Interest Advocacy Centre consumer group, joins the Do Not Pass Go podcast on Tuesday to talk about why Canada is behind and why broad click-to-cancel rules are sorely needed.