The Federal Trade Commission (FTC) is thinking about suing to stop Tapestry’s plan to buy Capri Holdings for $8.5 billion. They haven’t decided yet, but traders expect a decision this month. This news comes after the FTC asked for more details about the deal in November. There’s some worry about the deal because the FTC recently talked about focusing on competition. This is happening at the same time as the European Commission is deciding whether to look deeper into the deal.
Capri’s stock has fallen for three days straight, dropping by 11%. Some think Capri’s shares could be worth $30 each if the deal falls through. In August, Tapestry agreed to buy Capri for $57 per share, bringing together several big fashion brands.
The potential lawsuit is part of the FTC’s stricter stance on antitrust, especially under the Biden administration. They’ve already blocked some deals. Amazon’s CEO also criticized recent regulatory actions, saying they might be going too far.
- FTC’s Potential Lawsuit: The FTC is considering suing to block Tapestry’s acquisition of Capri Holdings due to antitrust concerns.
- FTC’s Scrutiny: The FTC has been closely examining the deal and has requested additional information, indicating potential concerns about competition.
- Market Reaction: Capri’s stock has dropped significantly amid speculation about the deal’s future, with some investors believing Capri’s standalone value could be much lower than the acquisition price.
- FTC’s Focus on Antitrust: The potential lawsuit reflects the FTC’s intensified focus on antitrust enforcement, particularly under the Biden administration and the leadership of Chair Lina Khan.
- Amazon’s Critique: Amazon’s CEO criticized recent regulatory actions, suggesting they might be overstepping legal boundaries and consuming excessive time and resources.
- European Commission’s Review: The European Commission is also reviewing the deal, indicating broader regulatory scrutiny beyond just the FTC.
These points summarize the situation surrounding the potential FTC lawsuit and the broader context of regulatory scrutiny and market reaction.
About Capri Holdings
CAPRI HOLDINGS is a distinguished powerhouse in the world of fashion luxury, boasting a collection of esteemed brands such as Versace, Jimmy Choo, and Michael Kors, each founded and driven by visionary creators. At the heart of every label within our portfolio lies a dedication to opulence and precision in craftsmanship. Our reputation is built upon our capacity to create groundbreaking and exquisite pieces that span the breadth of luxury fashion. Our triumph is rooted in the unique identity and heritage of each brand, the vibrant diversity and passion of our team, and our steadfast dedication to meeting the needs of both clients and communities.
About Tapestry
Tapestry serves as a hub for renowned brands on a global scale. It brings together the allure of Coach, Kate Spade New York, and Stuart Weitzman. The company harnesses its top-tier skills, fulfills its corporate responsibility objectives boldly, and utilizes its advantages, ranging from financial prowess to digital proficiency. These efforts are directed towards nurturing talent, enhancing brand growth, and improving customer and community outreach.
Yet, this narrative is merely the starting point. With an ethos of inclusivity, encouragement of dialogue, fostering creativity, and embracing humanity, Tapestry aims to push boundaries and expand horizons.
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