FTC Blocks $8.5 Billion Merger Between Tapestry and Capri
A U.S. judge has blocked the planned $8.5 billion merger between handbag giants Tapestry and Capri, marking a win for the FTC. This decision, centered around maintaining competition and keeping prices affordable, led to a significant drop in Capri shares while boosting Tapestry's stock.
In a decisive move, a U.S. judge has halted the $8.5 billion merger deal between major handbag makers Tapestry and Capri. This ruling is seen as a significant triumph for the Federal Trade Commission (FTC) as it seeks to preserve competitive balance within the handbag industry.
The FTC argued that the merger would have stifled competition and empowered the combined entity to escalate prices unfairly. As a result, Capri's stock plummeted by 47%, while Tapestry's shares experienced a 13% increase during after-market trading. The decision underscores the importance of competition in ensuring consumers have access to affordable luxury handbags.
The blocked deal delivers a boost to the Biden administration, which is keen on addressing consumer pricing concerns before the impending presidential election. While Japan and the European Union had approved the merger, the ruling halts what could have been a significant consolidation in the fashion industry.
(With inputs from agencies.)
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