WASHINGTON (dpa-AFX) - The U.S. Federal Trade Commission sued to block
Tapestry Inc.'s. (TPR) $8.5 billion acquisition of Capri Holdings Limited
(CPRI), a deal that seeks to combine three close competitors - Tapestry's Coach
and Kate Spade brands and Capri's Michael Kors brand. If allowed, the deal would
eliminate direct head-to-head competition between Tapestry's and Capri's brands.
It would also give Tapestry a dominant share of the 'accessible luxury' handbag
market, the FTC said in a statement on Monday.

The FTC alleged that the deal also threatens to eliminate the incentive for the
two companies to compete for employees and could negatively affect employees'
wages and workplace benefits. Post acquisition, the combined Tapestry and Capri
would employ roughly 33,000 employees worldwide.

Tapestry and Capri currently compete on everything from clothing to eyewear to
shoes.

In a separate press release, Capri said it strongly disagrees with the FTC's
decision. The company intends to vigorously defend the case in court alongside
Tapestry and complete the pending acquisition. The U.S. FTC is the only
regulator that did not approve the transaction, which received required
approvals from all other jurisdictions.

Tapestry said it has full confidence in the merits and pro-competitive nature of
the transaction. It will bring significant benefits to the combined company's
customers, employees, partners, and shareholders in the U.S. and around the
world. The company has strong legal arguments in defense of the transaction and
looks forward to presenting them in court and working expeditiously to close the
transaction in calendar year 2024.

In August 2023, Tapestry said it agreed to acquire Capri Holdings for a total
enterprise value of about $8.5 billion.

As per the deal, shareholders of Capri Holdings would get $57 per share.



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