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The Federal Trade Commission sued today to block Tapestry's $8.5 billion acquisition of Michael Kors' parent Capri Holdings.

Why it matters: The move by the regulator underscores just how tough its chair Lina Khan continues to be on industry consolidation.

Catch up quick: Tapestry owns Coach, Kate Spade and Stuart Weitzman, while Capri includes Versace and Jimmy Choo in addition to Michael Kors.

Both the European Union and Japan cleared the deal earlier this month.

Zoom in: Tapestry and Capri are among the largest makers of fashion and accessories in the U.S., but even a merger of the two would still be dwarfed by European rivals such as LVMH and Kering.

The two companies said in separate statements that they will defend the deal in court.

What they're saying: The FTC cited Tapestry's history as a serial acquirer and said that the deal not only reduces competition for customers, it "threatens to eliminate the incentive for the two companies to compete for employees."

"There is no question that this is a pro-competitive, pro-consumer deal and that the FTC fundamentally misunderstands both the marketplace and the way in which consumers shop," Tapestry said in a statement.

"The market realities, which the government's challenge ignores, overwhelmingly demonstrate that this transaction will not limit, reduce, or constrain competition," Capri said in a statement. "The U.S. FTC is the only regulator that did not approve this transaction, which received required approvals from all other jurisdictions."

FTC sues to block Tapestry's acquisition of Capri

The regulator says the merger would eliminate incentives to compete.

Illustration of a pair of aviator sunglasses with scales of justice moving up and down in one lens.

Mergers and acquisitions

Illustration of a hand reaching out for a hand shake with another hand making a stop gesture. 

The Federal Trade Commission <a class="gtmContentClick" data-vars-link-text="sued today to block" data-vars-click-url="https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-moves-block-tapestrys-acquisition-capri" data-vars-content-id="1481690e-6b04-4e66-8863-fdbf5fb96c14" data-vars-headline="FTC sues to block Tapestry&#x27;s acquisition of Capri" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-moves-block-tapestrys-acquisition-capri" target="_blank">sued today to block</a> Tapestry&#x27;s <a class="gtmContentClick" data-vars-link-text="$8.5 billion acquisition" data-vars-click-url="https://www.axios.com/pro/retail-deals/2023/08/10/tapestry-and-capri-tie-the-knot-in-9-billion-merger" data-vars-content-id="1481690e-6b04-4e66-8863-fdbf5fb96c14" data-vars-headline="FTC sues to block Tapestry&#x27;s acquisition of Capri" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/retail-deals/2023/08/10/tapestry-and-capri-tie-the-knot-in-9-billion-merger" target="_self">$8.5 billion acquisition</a> of Michael Kors&#x27; parent Capri Holdings.Why it matters: The move by the regulator underscores just how tough its chair Lina Khan continues to be on industry consolidation.

FTC sues to block Tapestry's acquisition of Capri

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