The US Federal Trade Commission (FTC) has taken legal action to block the $8.5 billion merger between Coach parent company Tapestry and Michael Kors owner Capri, citing concerns about creating a monopoly and eliminating competition. This move by the FTC is part of a broader effort to scrutinize large deals that could potentially lead to increased prices and harm consumers.

In response to Tapestry’s proposed acquisition of Capri, the FTC expressed worries that the merger would harm competition in the market, ultimately depriving consumers of the benefits that come from companies competing with each other. The competition at stake includes pricing, discounts, innovation, design, and marketing strategies.

While Tapestry had hoped that acquiring Capri would position them as a formidable player in the US fashion industry, rivalling European giants like LVMH, the FTC’s intervention has put a halt to the deal. The FTC had previously requested additional details from both companies regarding the merger, indicating a growing focus on maintaining fair and competitive markets.

Capri Holdings, the parent company of Michael Kors, expressed strong disagreement with the FTC’s decision, asserting that the merger would not harm competition as claimed by the FTC. Similarly, Tapestry defended the deal, emphasizing its pro-competitive and pro-consumer nature, and criticizing the FTC’s understanding of the market and consumer behavior.

Overall, the legal battle between the FTC and the companies involved highlights the ongoing efforts to preserve competition and protect consumer interests in the business world.

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