Italy's Autostrade and Spain's Abertis have abandoned their plan to create the world's biggest road operator, citing insurmountable obstacles put up by the Italian government.
But the companies said in a joint statement on Wednesday that they hoped to reconsider the merger in the future and vowed to continue the dialogue with Italian institutions.
The announcement marks the end of months of arm wrestling between the companies and the Italian government, which placed several regulatory hurdles in the way of the deal in an attempt to prevent Autostrade from falling into foreign hands.
Autostrade and Abertis said in a statement Autostrade's board had asked shareholders to abandon the planned deal at a meeting due to start at 11am.
"This is due to the fact that as things stand, there are insurmountable material obstacles to the completion of the merger," the companies said in the statement.
Shares in Autostrade, which were suspended before the announcement, shed more than 1.5 per cent when they reopened at 10.35am. They were trading down 0.18 per cent at €22.11 at 10.53 am. Abertis shares were up 0.34 per cent at €22.56.
Abertis's attempt to take over Autostrade had a bumpy ride from the start amid government concerns that change of ownership would lead to a dearth of investment in Italian roads.
Rome proposed changes to a lucrative motorway concession from Autostrade, thus depressing the overall company valuation, and highway regulator ANAS added to the obstacles for Autostrade on Friday by suing the Italian company over €2 billion of road investments ANAS said were not carried out.