FTC Sues to Block $8.5 Billion Fashion Merger | Trending Viral hub

[ad_1]

The Federal Trade Commission on Monday filed a lawsuit to block Tapestry’s $8.5 billion acquisition of Capri, a successful fashion alliance that would bring together Coach, Kate Spade, Michael Kors and Versace.

The lawsuit is a rare move by the agency to block a fashion deal, given that the industry does not suffer from a lack of competition. In her time as chair of the FTC, Lina Khan has made it a priority to take on the power of big business in all sectors. The agency has taken steps to block the merger of supermarkets between Kroger and Albertsons; goal acquisition from the virtual reality start-up Within; and Microsoft’s bid for gaming giant Activision. These efforts have had mixed results: The FTC failed to block the Microsoft deal and the Meta acquisition, which closed last year.

“Aiming to become a serial acquirer, Tapestry seeks to acquire Capri to further solidify its position in the fashion industry,” Henry Liu, director of the FTC’s Bureau of Competition, said in a statement.

“This deal threatens to deprive consumers of competition for affordable handbags, while hourly workers risk losing the benefits of higher wages and more favorable working conditions,” she said.

Tapestry said in a statement that “the FTC fundamentally misunderstands both the market and the way consumers shop.”

“Tapestry and Capri operate in an intensely competitive and highly fragmented industry alongside hundreds of rival brands, including established players and new entrants,” the statement said.

The treatment of fashion, announced in August, would create an American luxury conglomerate aimed at competing with European powers such as Louis Vuitton parent LVMH and Kering, the owner of Gucci. But it would pale in comparison to its size: According to 2023 figures, Capri, which owns Michael Kors, Versace and Jimmy Choo, and Tapestry, which owns Coach and Kate Spade, together have about $12 billion in revenue. LVMH had revenue of 86.2 billion euros, or about $92.2 billion, last year.

The FTC has been examining the deal for months, even when it was approved by regulators in the European Union and Japan. Traders have increasingly bet against the likelihood of it passing: Capri’s shares have fallen more than 14 percent this year, while Tapestry’s has gained 6 percent. (Typically, the shares of an acquisition target gain while the buyer’s shares fall.)

[ad_2]

Check Also

SC slams EVM critics, says no attempt should be made to bring down system | Lok Sabha Election News | Trending Viral hub

[ad_1] 5 minutes of reading Last update : April 17, 2024 | 00:21 IS The …

Smartmatic and OAN settle defamation lawsuit | Trending Viral hub

[ad_1] Election technology company Smartmatic settled Tuesday in its defamation lawsuit against One America News …

Participant, socially conscious film maker, resigns | Trending Viral hub

[ad_1] For 20 years, Participant Media has been Hollywood’s leading creator of activist entertainment, backing …

Leave a Reply

Your email address will not be published. Required fields are marked *