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.

Shares of Coach and Kate Spade parent Tapestry jumped Thursday morning while those of Michael Kors and Versace owner Capri Holdings fell after they called off their planned merger over ongoing legal challenges.

The parent companies of brands such as Coach, Kate Spade, Versace and Michael Kors decided not to proceed with a court battle.

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.

Tapestry is terminating its $8.5 billion deal to buy Michael Kors owner Capri following a legal hurdle, the companies said on Thursday, ending their effort to create a U.S. luxury giant to compete with major European players.

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.

Tapestry said on Thursday it was terminating its $8.5 billion deal for Michael Kors owner Capri after the deal was blocked by a U.S. judge. Shares of Tapestry were up 5% in premarket trading, while those of Capri were down 3%.