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 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.

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

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.

For Tapestry, which gets 76% of its revenue from Coach, a mature brand, the goal of the merger was to find new sources of growth. For Capri, Tapestry's strong data, marketing and real estate capabilities, would have potentially helped Michael Kors, Versace and Jimmy Choo end their long-time slumps.

(Reuters) -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. The deal would have ...

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%.

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