The U.S. Federal Trade Commission (FTC) has filed a lawsuit to block Tapestry, Inc.’s $8.5 billion acquisition of Capri Holdings, Ltd., the parent company of Michael Kors. The FTC alleges that the deal, which would combine luxury brands such as Coach, Kate Spade, and Jimmy Choo under one roof, would eliminate direct competition between the two companies and result in higher prices for consumers.
“If allowed, the deal would eliminate direct head-to-head competition between Tapestry’s and Capri’s brands,” the FTC said in a statement. “This would likely result in higher prices and reduced innovation in the luxury fashion market.”
Tapestry and Capri had previously received regulatory approval for their merger from the European Union and Japan. However, the FTC’s lawsuit could delay or even prevent the deal from closing in the United States.
