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 (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.

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.