NEW YORK, April 23, 2024 (BSS/AFP) - The US Federal Trade Commission (FTC) said Monday it has sued to block fashion group Tapestry's $8.5 billion deal to buy Capri, which owns luxury brands including Michael Kors and Versace.

The planned acquisition, first announced last August and seen as a bid to create a new global fashion giant to compete with European powerhouses, "would eliminate direct head-to-head competition between Tapestry's and Capri's brands," the FTC said in a statement.

The proposed deal would also "give Tapestry a dominant share of the 'accessible luxury' handbag market," the US antitrust regulator added.

The all-cash takeover aims to boost sales by combining customer data streams, broadening geographic reach and achieving some $200 million in annual cost savings within three years of the deal closing, the two firms said last year.

If it goes ahead, the new company would also include Tapestry's Stuart Weitzman and Capri's Jimmy Choo -- both prominent shoe brands.

The acquisition would give Tapestry an upscale portfolio with multiple brands focused on shoes and handbags, as well as a strengthened apparel offering with Versace and Kors, also a celeb favorite.

"The proposed merger threatens to deprive millions of American consumers of the benefits of Tapestry and Capri's head-to-head competition," the FTC said in a statement.

This includes "competition on price, discounts and promotions, innovation, design, marketing, and advertising," it added.

The FTC, an independent agency whose chair was appointed by President Joe Biden, and the Department of Justice's antitrust division have ramped up action against corporate mergers in recent years.

In late February, the FTC moved to block a major supermarket merger.

Just a few days later, JetBlue and Spirit Airlines announced they would call off their planned fusion, after a court in January sided with the Justice Department and halted the deal.