Luxury retailers Capri Holdings (CPRI) and Tapestry (TPR) have called off their planned $8.5 billion U.S. merger.
The deal has been scuttled after the Federal Trade Commission (FTC) successfully sued to block the deal, citing competition concerns.
The two U.S.-based luxury companies said that they have “mutually agreed” to terminate the deal, saying it is in the best interests of the companies and their shareholders.
The merger had a February 2025 expiration date and getting regulatory approval before that date looked doubtful after the FTC filed its lawsuit.
The $8.5 billion U.S. merger, announced in August 2023, would have combined America’s two biggest luxury houses.
The combination also would have brought together fashion brands such as Coach, Kate Spade, Versace, Jimmy Choo and Michael Kors.
The FTC launched a lawsuit to block the deal, saying the tie-up would disadvantage consumers and reduce benefits for the two companies’ employees.
Last month, a federal judge ruled in the FTC’s favour and granted its motion for an injunction to block the deal.
At the time, Capri and Tapestry said that they would appeal the judge’s ruling. However, they have now decided to abandon the merger entirely.
The stock of Capri Holdings has declined 60% this year and currently trades at $19.65 U.S. per share. Tapestry’s stock has risen 34% year-to-date and trades at $51.26 U.S. a share.