FTC may try to block yet another business merger

Pls share this post


Listen to this article

Federal antitrust regulators are planning to file a lawsuit to block Coach parent Tapestry’s $8.5 billion bid to buy Michael Kors owner Capri, according to a report by New York Times Dealbook.

The Federal Trade Commission (FTC) is expected to hold a meeting next week to discuss the case, which could lead the commissioners to hold a vote on filing the lawsuit — though the report noted that the agency may decide not to sue.

The proposed merger would bring together top luxury brands including Tapestry’s Kate Spade and Stuart Weitzman with Capri’s Jimmy Choo and Versace. The companies received clearance from regulators in the European Union and Japan on Monday.

If it proceeds, the merger would create a U.S. fashion powerhouse that could be more competitive with larger European rivals like Louis Vuitton parent company LVMH and Gucci owner Kering as the industry deals with a slowdown in spending on luxury fashion.

READ ALSO  National Debt Tracker: American taxpayers (you) are now on the hook for $34,571,627,122,114.08 as of 4/25/24

US STEEL SHAREHOLDERS VOTE ON CONTROVERSIAL NIPPON DEAL

The FTC asked the two companies for more information about the merger in November, a few months after the deal was first proposed in August.

The Times’ report noted that regulators may be concerned that the merger could undercut competition between brands on pricing, which could result in consumers paying a higher price to buy products from the brands.

KROGER-ALBERTSONS MERGER: IS IT GOOD OR BAD FOR SHOPPERS?

Tapestry CEO Joanne Crevoiserat has said that she expects the deal to be finalized in 2024 and told Bloomberg in an interview on Monday, “We know that given the landscape, it just takes time to work through the issues,” and added that she doesn’t believe it’s necessary for the company to sell off some of its brands to ensure the deal goes through.

READ ALSO  Consumer ETFs showing the real inflation picture

Capri’s stock was down 2.72% during Wednesday’s trading, while Tapestry’s fell 0.91%.

If the FTC moves to block the merger, it will be the latest effort by the agency during the Biden administration to block mergers and acquisitions that it views as undermining competition.

CAPITAL ONE’S PURCHASE OF DISCOVER FACES POLITICAL AND REGULATORY HURDLES

The pending merger between grocery store chains Albertsons and Kroger is currently facing a legal challenge from the administration.

A proposed merger between budget airlines Spirit and JetBlue was called off after a federal judge sided with the FTC in its lawsuit challenging the tie-up.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

READ ALSO 
Spirit Airlines CEO says industry is like a 'rigged game,' US consumers are 'long-term losers'

The FTC’s effort to block Microsoft’s acquisition of Activision Blizzard was rejected by a federal court and that $75 billion deal was completed in October 2023.

President Biden has signaled his opposition to Nippon Steel’s more than $14 billion bid to buy U.S. Steel, which is currently undergoing an antitrust investigation though the administration hasn’t filed a lawsuit to block it at this time.

Reuters contributed to this report.

Source



Pls share this post
Previous articleHow to turn off your PS5
Next article
‘Googlers against Genocide’ arrested after 10 hour sit-in at corporate headquarters: WATCH