Music company EMI said it has abandoned plans for the time being to buy smaller rival Warner Music.
The announcement sent EMI shares down as much as 7 per cent today.
The decision was expected by many following a European court judgment this month that annulled the 2004 approval of the merger between Sony Music and BMG, casting doubt on whether regulators would allow further consolidation in the industry.
EMI and Warner Music had been seeking to buy each other, with both offering about $4.6 billion. The rival bids were rejected.
The duelling takeover proposals were the latest of multiple attempts in recent years to combine the companies to create a rival on par with market leader Universal Music, owned by France's Vivendi, and Sony BMG, a joint venture between Japan's Sony and German media conglomerate Bertelsmann.
EMI shares were down 2.5 per cent to 255 1/4 pence at 9.29, the second-biggest faller on the UK mid-cap index. They were off an earlier low of 244 1/4p.