Tapestry officially withdrew from its $8.5 billion acquisition of Capri, the owner of Michael Kors and Versace, following regulatory resistance from the FTC, which argued the merger would stifle competition in the luxury handbag market.

The decision marks the end of Tapestry’s plan to create a U.S. luxury powerhouse to rival European brands, but investors responded positively as Tapestry announced a $2 billion share buyback, pushing its stock up 12%, while Capri’s shares rose 5% with a new restructuring plan, including job cuts and store closures.