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Sunday, June 22, 2025 1:01 AM

Biden Administration

US Court Blocks Tapestry’s $8.5 Billion Acquisition of Capri, Marking FTC Win

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A US federal judge blocked Tapestry’s $8.5 billion acquisition of rival Capri on Thursday, delivering a major win for the Federal Trade Commission (FTC) and the Biden administration ahead of the November 5 presidential election. Rising consumer prices are a primary concern for voters, making this ruling a strategic victory for the administration. The FTC argued that merging two of the biggest US handbag and accessories brands would stifle competition, allowing the new entity to unfairly raise prices on popular brands. After an eight-day trial, US District Judge Jennifer Rochon ruled against Tapestry and Capri, rejecting the companies’ argument that handbags are nonessential and that consumers could choose not to purchase them if prices rose. Capri’s shares dropped sharply by 47% following the decision, while Tapestry shares saw a modest increase of 13% in after-market trading. The proposed acquisition would have combined six high-profile brands: Tapestry’s Coach, Kate Spade, and Stuart Weitzman with Capri’s Versace, Jimmy Choo, and Michael Kors. The FTC’s Henry Liu praised the decision as “a victory for consumers across the country seeking access to quality handbags at affordable prices.” Judge Rochon, emphasizing handbags’ significance in fashion and daily life, indicated the ruling effectively ends the merger, as the required additional FTC review would stretch beyond the deal’s February 10 termination date. Tapestry expressed disappointment, stating its belief that the merger is “pro-competitive and pro-consumer” and indicated plans to appeal. While Tapestry and Capri argued the merger was needed to combat European competitors like Gucci, the judge ruled that Capri has the resources to sustain its brands independently, deeming the merger unnecessary. This case adds a notable precedent to FTC intervention in the fashion industry, where mergers are rare due to its fragmented nature, setting a benchmark in consumer protection within accessible luxury markets. Source: Business Standard

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Biden Administration in Ongoing Talks with U.S. Congress on High-Altitude Drone Deal Amid Pannun Investigation Concerns

In a diplomatic development, the Biden administration is actively engaged in discussions with the U.S. Congress regarding the high-altitude drone deal, which was initially announced during Prime Minister Narendra Modi’s visit to Washington in 2023. Contrary to expectations of a routine approval, a report from online news portal The Wire suggests that certain U.S. lawmakers have put a hold on the deal, linking it to concerns surrounding the Pannun investigation. The U.S. Embassy in India responded to the report, stating that the administration “continues to discuss with U.S. Congress the potential sale consistent with standard processes and policies guiding such arm sales decisions.” While indicating that Congressional clearance is still in progress, the response did not deny the reported hold on the sale by one or more U.S. lawmakers. As part of the standard process, the State Department routinely engages foreign affairs committees before formal notification to address questions from committee staff, according to a U.S. Embassy spokesperson. The report surfaced following a recent visit to Delhi by senior U.S. State Department officials, including Assistant Secretary of State for South and Central Asia Donald Lu, emphasizing the need for India to show progress in the high-level enquiry committee related to the Pannun case. The investigation, led by the FBI and DEA, resulted in a charge-sheet against Indian national Nikhil Gupta. The case involves an alleged plot to target Khalistani separatists in the U.S. and Canada on behalf of a senior Indian security official. The case has drawn international attention, with U.S. lawmakers criticizing the Modi government during a Senate committee hearing in December 2023. While the Arms Export Control Act provisions were suggested to restrict arms transfers to countries engaged in acts of intimidation, the objections over the drone deal remain undisclosed due to the secrecy around the process. The deal for 31 MQ-9B high-altitude long-endurance Unmanned Aerial Vehicles (UAV) is estimated to cost India over $3 billion and is a significant component of the high-tech collaborations between the two countries. The MQ-9B drones, aimed at bolstering the Intelligence, Surveillance, and Reconnaissance (ISR) capabilities of the Indian Armed Forces, are part of key technological deals between the U.S. and India. The ongoing negotiations and concerns highlight the complexity of international arms deals and their intersection with geopolitical considerations.

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