FTC to sue to block Cintas-UniFirst deal, Semafor reports

FTC Expected to Sue to Block $5.5 Billion Cintas-UniFirst Acquisition

FTC Scrutiny of Cintas-UniFirst Deal

Oct 27 (Reuters) - The Federal Trade Commission has indicated to uniform rental firm Cintas that it will sue to block its proposed $5.5 billion acquisition of rival UniFirst, Semafor reported on Tuesday, citing people familiar with the matter.

The FTC has not yet voted on whether to sue, but its staff have privately expressed concerns about the companies' combined market share, the report added.

Key Details of the Proposed Acquisition

Here are more details:

Background and Deal Structure

• In March, Cintas, valued at $89.71 billion, agreed to buy smaller rival UniFirst in a cash-and-stock deal, combining two of North America's largest workwear and facility services providers. UniFirst has a market cap of $5.06 billion

Acquisition Pursuit Timeline

• The deal capped a multi-year pursuit in which Cintas had made at least three formal approaches since 2022

Strategic Rationale

• Cintas was banking on the deal to expand its reach and cut costs by combining delivery routes, plants, and supply chains, as it looked to better compete with rivals

Market Reaction

• Shares of UniFirst fell 8% on Tuesday, while Cintas was down about 5%

Stakeholder Responses

• Cintas, UniFirst and the FTC did not immediately respond to Reuters' requests for comment

Reporting Credits

(Reporting by Koyena Das in Bengaluru; Editing by Maju Samuel)