Exclusive / FTC flexes its muscles on $5 billion uniform deal - Semafor

The Federal Trade Commission has indicated to Cintas, which is seeking to buy its rival Unifirst in a $5 billion deal, that it will sue to block the transaction, according to people familiar with the matter.

The regulator has not voted on the decision, and a formal “last-rites” meeting has not yet been held, some of the people said, but FTC staff have privately expressed concerns over the companies’ combined market share.

“The FTC has not voted on a final decision in this transaction. Any decision will not be communicated through the press,” a spokesperson said. Cintas did not respond to requests for comment.

Cintas is an $84 billion giant that provides uniforms, cleaning supplies, and office materials to businesses across the country; Cintas had sought to buy Unifirst, a smaller rival that operates in the same businesses, for years. Unifirst shares dropped 12% after Semafor reported that the FTC would seek to block the deal; Cintas shares fell 6%.

A lawsuit would run counter to the notion of many dealmakers and companies that the FTC and the Justice Department’s antitrust division will take a light-touch approach to all mergers. Another notable example: the Trump administration’s approval of Paramount’s $110 billion acquisition of Warner Bros. Discovery, which faced intense staff scrutiny but was ultimately approved by federal antitrust regulators.