05:38 PM EDT, 04/22/2024 (MT Newswires) -- Tapestry's (TPR) $8.5 billion proposed acquisition of Capri Holdings ( CPRI ) will eliminate competition between their brands and give Tapestry a dominant share of "accessible luxury" handbag market, the US Federal Trade Commission said Monday.

The FTC issued an administrative complaint and authorized a lawsuit in a federal court to block the proposed transaction, according to the regulator.

Tapestry said in a statement that the US regulator "fundamentally misunderstands both the marketplace and the way in which consumers shop" and it looks forward to presenting defensive arguments in court. The company also expects to close the deal this year.

Capri said in a separate statement that it disagrees with the FTC's decision and plans to vigorously defend the case and complete the deal.