Biden Regulators Take Aim At Yet Another Multi-Billion Dollar Deal In Antitrust Crackdown

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Will Kessler Contributor
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The Federal Trade Commission (FTC) on Monday sued to stop another multi-billion dollar merger on anticompetitive grounds, this time between fashion giants Tapestry, Inc. and Capri Holdings Limited.

Tapestry, owner of brands Coach and Kate Spade, sought to acquire Capri, owner of brands Michael Kors and Versace, in a $8.5 billion deal first announced in August 2023, according to an announcement from Capri. The FTC argues that the deal would eliminate direct competition between the brands and would give Tapestry too dominant a share of the “accessible luxury” handbag market. (RELATED: Biden Vowed To Protect American Steel — But Another Effort Of His Could Destroy It)

“With the goal to become a serial acquirer, Tapestry seeks to acquire Capri to further entrench its stronghold in the fashion industry,” Henry Liu, director of the Bureau of Competition at the FTC, said in the press release. “This deal threatens to deprive consumers of the competition for affordable handbags, while hourly workers stand to lose the benefits of higher wages and more favorable workplace conditions.”

The FTC alleges that the merger would deprive millions of American consumers of competition on prices, discounts, promotions and innovation that results from the competition between the two companies. Regulators also expressed concern that the combined 33,000 workers at the companies would see their wages and workplace benefits negatively affected by less competition.

“Capri Holdings strongly disagrees with the FTC’s decision,” Capri said in a press release following the announcement. “The market realities, which the government’s challenge ignores, overwhelmingly demonstrate that this transaction will not limit, reduce, or constrain competition. Tapestry and Capri operate in the fiercely competitive and highly fragmented global luxury industry. Consumers have hundreds of handbag choices at every price point across all channels, and barriers to entry are low.”

The suit is one of many initiated under Lina Khan, head of the FTC in the Biden administration, including a September suit against Amazon claiming that the company exhibited a pattern of illegal conduct equating to a monopoly. A federal judge denied a motion from the FTC to block a $68.7 billion merger of Microsoft and Activision in July 2023.

More recently, the FTC sued to stop the $24.6 billion proposed merger between grocers Kroger Company and Albertsons Companies, Inc. on claims it would stifle competition.

The Department of Justice has also launched several antitrust suits, including against JetBlue Airways’ $3.8 billion acquisition of Spirit Airlines. The deal would have created the 5th largest U.S. airline out of the 6th and 7th and followed years of successful mergers by other top airline companies.

“Capri intends to vigorously defend this case in court alongside Tapestry and complete the pending acquisition,” Capri wrote. “The U.S. FTC is the only regulator that did not approve this transaction, which received required approvals from all other jurisdictions. We remain confident in this combination and the value it will bring to all stakeholders.”

Tapestry and Capri did not immediately respond to a request to comment from the Daily Caller News Foundation. The FTC deferred to the press release.

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