FTC Sues to Stop Loctite, Liquid Nails Construction Adhesive Merger

Today, the Federal Trade Commission sued to block Henkel AG & Co. KGaA (Henkel), the manufacturer of the industry-leading Loctite brand construction adhesives, from acquiring Loctite’s main competitor, Liquid Nails. The FTC’s enforcement action seeks to lower the cost of housing for Americans by protecting U.S. consumers from paying higher prices for the materials they use to build and maintain their homes.

Under the terms of the proposed deal, Henkel and its U.S. subsidiaries seek to acquire Liquid Nails for $725 million from private equity firm American Industrial Partners. The deal would combine the two biggest brands—by far—of construction adhesives sold at retailers like The Home Depot, Lowe’s, and Ace Hardware, according to the FTC’s complaint.

The FTC alleges that the merger would eliminate fierce competition between Loctite and Liquid Nails, leading to higher prices, lower quality, and reduced innovation, all of which would be detrimental to American consumers. 

“Affordable, high-quality housing is essential to the American Dream, and the antitrust laws protect Americans from anticompetitive mergers that threaten to drive up the costs of the products we use to build and maintain our homes,” said Daniel Guarnera, Director of the FTC’s Bureau of Competition. “Today’s enforcement action underscores the Trump-Vance FTC’s commitment to doing our part to make sure that Americans benefit from competition—like the competition between Loctite and Liquid Nails—that lowers the cost of homeownership and home improvement.”

Loctite and Liquid Nails dominate the shelves at retail stores across the country, as the clear top two brands of construction adhesives. Each company has long viewed the other as its top competitor. By combining the top two brands, Henkel’s acquisition of Liquid Nails will eliminate head-to-head competition between Loctite and Liquid Nails, which has benefited American consumers in the form of lower prices, higher quality, and increased innovation, the FTC’s complaint alleges.

The combination of Loctite and Liquid Nails will significantly increase concentration and result in a highly concentrated market that is considered unlawful under current antitrust caselaw and the FTC and Department of Justice’s joint merger guidelines, according to the FTC’s complaint.

The Commission vote to authorize staff to seek a permanent injunction to block the proposed acquisition was 2-0.

The federal court complaint and request for permanent equitable relief was filed in the U.S. District Court for the Southern District of New York.