The Federal Trade Commission announced Monday that it has filed a lawsuit seeking to block Coach’s parent company Tapestry’s $8.5 billion deal to buy Michael Kors owner Capri, saying it eliminates competition.
This comes as several U.S. lawmakers are calling for increased FTC oversight of multibillion-dollar transactions that risk price gouging and could impact consumers.
U.S. antitrust enforcement authorities also issued new merger guidelines in December aimed at encouraging fair, open and competitive markets.
“The proposed merger could deprive millions of U.S. consumers of the benefits of direct competition between Tapestry and Capri, including prices, discounts and promotions, innovation, design, marketing, and advertising,” the FTC said in a statement. This includes competition such as.
Tapestry had offered to buy Capri in August, giving the US fashion giant a chance to effectively battle larger European rivals such as Louis Vuitton’s parent company LVMH and capture a larger share of the global luxury goods market. I was thinking of creating one.
However, the FTC asked both companies in November for more information about the transactions.
“Capri Holdings strongly disagrees with the FTC’s decision,” the company said in a statement. “The market realities that the government’s challenge ignores overwhelmingly demonstrate that this transaction does not limit, reduce, or constrain competition.”
Tapestry also said in a statement: “There is no question that this is a pro-competitive, pro-consumer transaction, and that the FTC fundamentally misunderstands both the market and the way consumers shop.” .
The companies received regulatory approval from the European Union and Japan in early April for a deal that would bring top luxury brands such as Kate Spade and Jimmy Choo under one roof.
