The FTC claims the deal between Tapestry and Michael Kors would impact 33,000 employees globally|Phillip Pessar|CC BY 2.0
The Federal Trade Commission filed a lawsuit yesterday to block Tapestry (Coach parent) from acquiring Capri (owner of Michael Kors) for $8.5 billion, citing monopoly concerns.
The FTC claims the deal would eliminate direct competition between the two luxury handbag brands while impacting 33,000 employees globally by reducing wages and benefits.
The move aligns with recent calls from US lawmakers for increased scrutiny from the agency of large mergers to prevent price hikes. In December, antitrust enforcers introduced new guidelines to encourage fair market competition.
The agency has also been taking an increasingly aggressive stance on antitrust enforcement. It recently sued to block Kroger and Albertsons’ $25 billion merger.
The merger between Tapestry and Capri received regulatory clearance from the European Union and Japan. Coach parent has said it expects to close the deal by the end of this year.
If the merger goes ahead, the new company would have more than $12 billion in annual sales with brands like Kate Spade, Stuart Weitzman, Jimmy Choo and Versace under one roof.