California settles lawsuit over Paramount Warner merger

The Federal Trade Commission’s chair, Lina Khan, told reporters that a coalition of state attorneys general possesses “a very strong” legal case that the proposed acquisition of Capri Holdings by Tapestry, Inc. violates U.S. antitrust law. The statement came as the FTC and more than a dozen states prepared to challenge the $8.5 billion deal, arguing that the merger would substantially lessen competition in the luxury apparel market by consolidating two of the industry’s leading designers—Coach, Kate Spade, and Stuart Weitzman under Tapestry, and Michael Kors, Versace, and Jimmy Choo under Capri.

Khan’s comments underscore the heightened scrutiny the merger faces after the FTC filed a lawsuit in early 2024, citing concerns that the combined entity could wield excessive market power, raise prices, and limit consumer choice. State attorneys general from California, New York, Texas and other jurisdictions have joined the federal effort, filing separate complaints that mirror the FTC’s arguments and seek to block the transaction before it closes. The agencies are expected to present their case to a federal judge later this month, and a ruling could set a precedent for future cross‑border consolidations in the fashion sector.