Tempur Sealy International agreed to buy a controlling stake in Mattress Firm from Steinhoff International Holdings NV in a cash and stock deal valued at about $4 billion.
The deal will be funded by about $2.7 billion of cash and $1.3 billion worth of stock, Steinhoff said in a statement Tuesday.
Mattress Firm, which sells mattresses in more than 2,400 stores across 49 US states, is expected to operate as a separate business unit within Tempur Sealy.
The agreement, which does not require shareholder approval from Tempur Sealy holders, is expected to close in the second half of 2024.
Tempur Sealy shares were down as much as 8% in pre-market trading at 6:47 a.m. in New York.
JP Morgan Securities serving as sole financial adviser to Tempur Sealy. Goldman Sachs, Barclays, and Jefferies served as financial advisers to Mattress Firm.
Steinhoff announced in January that Mattress Firm was withdrawing its initial public offering registration to explore all options.