Aveva's share price plummeted more than 36 per cent this morning after the engineering group called off talks with Schneider Electric, saying a merger would create "significant" challenges "that could not be overcome without considerable additional risk and cost".
The two businesses had announced a merger this summer, in which Schneider would have paid £550m for a 53.5 per cent stake in the combined business, shifting its focus from oil and gas to nuclear power and pharmaceuticals.
Aveva shareholders stood to receive the equivalent of around £26 a share - a 47 per cent premium on the share price when the deal was announced - brokers at Investec estimated.
However the deal is not to be - and Aveva's share price was down 36.2 per cent in early trading as a result.
A joint statement issued this morning said talks had been called off after "a period of extensive due diligence".
The "integration challenges" were exacerbated by "the highly complex structure of the proposed transaction," Aveva said.
"As a result, the board has determined that the anticipated uplift in shareholder value was unlikely to have been realised to the extent previously considered."
The deal has been terminated by mutual consent and incurs no fees on either side.