Tapestry Inc.’ stock jumped 6.8% early Thursday, while Capri Holdings Inc.’s stock fell about 4%, after Tapestry said it’s terminating its $8.5 billion merger agreement with its smaller rival.

Capri Holdings Ltd and Tapestry Inc. scrapped their $8.5 billion plan to merge after a court order freezing the proposed combination of the US fashion companies due to antitrust regulators’ objections.

Fashion companies Capri Holdings Limited and Tapestry -- parent companies behind the Coach and Michael Kors brands -- ended their $8.5 billion merger deal Thursday. The deal was blocked by the Federal Trade Commission.

Tapestry—the owner of luxury brands such as Kate Spade and Coach—and Capri—owner of Michael Kors, Versace and Jimmy Choo ended their merger efforts after a federal lawsuit sought to block the deal.

Capri Holdings (CPRI) and Tapestry, Inc. (TPR) have terminated their $8.5B merger deal due to regulatory challenges.

Tapestry, and Capri Holdings Limited have mutually agreed to terminate their merger agreement due to legal uncertainty. Tapestry will redeem $6.1 billion in notes and maintain dividends while pursuing share repurchase program.

Capri and Tapestry have mutually agreed to terminate their planned merger. Capri CEO continues to see long-term potential in the company.

Capri Holdings Ltd and Tapestry Inc. have ended an $8.5 billion plan to merge after a US court order freezing the deal due to US antitrust regulators’ objections.

Tapestry and Capri Holdings have scrapped their merger plans a few weeks after the Federal Trade Commission sued to block the deal. Tapestry shares gained 6.7% in premarket trading, while Capri stock fell 4.