Capri plunges after US Judge blocks $8.5B merger deal with Tapestry
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Investing.com -- The Tapestry-Capri $8.5B merger deal has been blocked by a U.S. judge on Thursday concerns that the tie-up of the two luxury handbag makers could stifle competition.
Following seven days of testimony, Judge Jennifer L. Rochon ruled in favor of the Federal Trade Commission's case to block the deal.
The FTC argued that the merger likely will "substantially lessen competition" in the market for accessible-luxury handbag and allow the combined entity to raise prices for consumers.
Capri Holdings Ltd (NYSE: CPRI) fell more than 51% in afterhours trading, while Tapestry Inc (NYSE: TPR) rose 8%.
Capri Holdings and Tapestry asserted in court documents that the move to enjoin the merger preliminarily “will have the effect of blocking the [merger] permanently."
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