U.S. Court Halts $8.5 Billion Tapestry-Capri Merger

A U.S. judge blocked the $8.5 billion merger between handbag makers Tapestry and Capri, marking a victory for the FTC. The merger would have reduced competition between the two largest U.S. handbag companies. The ruling favors the Biden administration's focus on controlling consumer prices.

In a significant ruling, a U.S. judge has blocked the proposed $8.5 billion merger between leading handbag makers Tapestry and Capri. The decision is seen as a rare victory for the Federal Trade Commission, which argued that the merger would stifle competition and potentially lead to unfair consumer price hikes.

The ruling had an immediate impact on Tapestry's stock, which surged by 13% in after-market trading. While Tapestry and Capri defended their merger as a strategic move against competitors, particularly European luxury brands, the court's decision prevents this consolidation from proceeding.

This outcome is politically significant amid the Biden administration's efforts to control rising consumer prices. With the merger blocked, Tapestry and Capri will remain separate entities, maintaining existing market dynamics in the fashion industry.

(With inputs from agencies.)