The deal, announced on Wednesday, would combine the two largest U.S. mid-tier jewelry s

The deal looked at combining the two largest U.S. mid-tier jewelry store chains, Zales and Signet's Kay Jewelers.

Kay competes with Zale Corp ZLC.N in the mid-tier jewelry market and has been winning market share from Zales.

Last year, the two largest U.S. mid-tier jewelry store chains combined, with Signet Jewelers buying Zale Corp for $1.46 billion.