Tapestry-Capri Merger Blocked

Investing.com — The Tapestry-Capri $8.5 billion merger deal has been blocked by a U.S. judge due to 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 (FTC) case to block the deal.

The FTC argued that the merger is likely to "substantially lessen competition" in the market for accessible-luxury handbags and allow the combined entity to raise prices for consumers.

Capri Holdings Ltd (NYSE:CPRI) fell more than 51% in after-hours trading, while Tapestry Inc (NYSE:TPR) rose 8%.

Capri Holdings and Tapestry stated in court documents that the move to enjoin the merger preliminarily "will have the effect of blocking the merger permanently."