Aviva has withdrawn its £17bn offer for Prudential, blaming the lack of interest from the Pru management for the merger plan's collapse.
Aviva's hand was forced early this week when news leaked that it had appraoched the Pru board with a 600p-a-share offer.
The company said in a London Stock Exchange statement: "Aviva believes that the merger, on these terms, would have created significant value for both sets of shareholders.
"Aviva made clear that its proposal was dependent on the co-operation of Prudential. As this co-operation has not been forthcoming, Aviva has decided to withdraw its proposal."
Analysts said both Aviva and Pru shareholders were understood to be unhappy with a share only deal, without any cash consideration.
Aviva said that it had to the decision as "it was not in the best interests of its shareholders to make any material adjustment to its proposed terms."
Pru's shareprice fell back sharply on the news, dropping from 725p to 668p. Aviva's shareprice also dropped 10p from 842p to 832p. ]
Pru's shareholders have asked the Board to explain its reluctance in "even opening communication channels" with Aviva's management.
