Tapestry, the owner of Coach, said it would abandon its $8.5 billion deal to buy Capri, the parent company of Michael Kors, after the Federal Trade Commission successfully sued to stop the transaction.

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

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.

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 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.

Fashion group Tapestry said Thursday that it was dropping its $8.5 billion bid for Capri, the owner of luxury brands including Michael Kors and Versace, following a successful legal challenge

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%.