Former Dutch state phone company KPN and its Belgian counterpart, Belgacom SA, ended long-running merger talks today, saying the slump in telecom stocks made it harder to agree on terms.
"The current market environment in the telecommunications sector has been a complicating factor," the companies said in a joint statement. "It has not been possible to reach agreement on key terms."
KPN, which is labouring under massive debt, saw its share price plummet 24 per cent after the news was announced.
The Belgian government still holds a majority stake in Belgacom, which is not traded.
The two didn't say on which terms they failed to agree. However, officials have said they've been struggling for months on questions of valuation and control.
Smaller but cash-rich Belgacom proposed a merger of equals in April.
But since June KPN's share price has fallen on mounting concern over its net debt of euro 23 billion, leading Belgacom to demand a bigger stake in the merged entity.