Amidst recent market fluctuations, Tapestry, Inc. (NYSE: TPR) has experienced a notable surge of 16.74% in its shares during extended trading sessions, driving its valuation to $47.70. This significant escalation in TPR’s stock value ensued subsequent to a relatively stable regular trading session that concluded with minimal change at $40.86. The upsurge in TPR stock is intricately linked to the recent merger announcement.
Tapestry (TPR) disclosed in a Securities and Exchange Commission (SEC) filing on Monday that it signed an Agreement and Plan of Merger with Sunrise Merger Sub, Inc., a British Virgin Islands-incorporated company that Tapestry fully owns, and Capri Holdings Limited, another British Virgin Islands-based company, on August 10, 2023.
As per the criteria and contingencies outlined in the merger agreement, Tapestry has committed to purchasing Capri. Notably, regulatory clearance from the European Commission under the EU Merger Regulation (EUMR) and the Fair Trade Commission of Japan (JFTC) under the Antimonopoly Act are required for this transaction to be completed.
The JFTC granted unconditional approval for the transaction on April 10, 2024, while the EC provided its unconditional approval on April 15, 2024. Presently, the sole remaining hurdle for antitrust regulatory clearance lies within the United States.
This merger endeavor, which aims to amalgamate renowned luxury brands such as Tapestry’s Kate Spade and Stuart Weitzman with Capri’s Jimmy Choo and Versace, awaits clearance from U.S. regulatory authorities. The U.S. Federal Trade Commission (FTC) solicited further information regarding the proposed merger from both companies in November, several months after the initial announcement.
Tapestry is diligently cooperating with the FTC’s inquiries, and the merger remains on course for completion within the 2024 calendar year. Consolidating the two companies through this merger would enable Tapestry to enhance its competitiveness vis-à-vis Paris-listed LVMH in the European luxury market, notwithstanding the fluctuating demand for upscale handbags and accessories in the United States.
