UK insurer Prudential has scrapped plans to buy AIA, the Asian business of US insurer AIG.
The deal collapsed after Prudential failed to negotiate a lower price for AIA.
In March, Prudential agreed to buy AIA for $35.5bn (£24.6bn), but last week asked for the price to be cut to nearer $30bn after shareholder opposition.
AIG said on Tuesday that it would not "not consider" any revision to the terms of the deal.
The Prudential said it faced £450m ($653m) in costs related to the deal, including a break fee of about £152m.
The company's shares were 3.3% lower in early morning London trading and later closed 2.5% down at 561 pence.
On Tuesday, reports that the deal was being pulled had sparked a share price rise among relieved shareholders.
Prudential had sought to fund the takeover by raising £14.5bn from shareholders through a rights issue, the biggest in the UK's history.
But a number of the company's shareholders were opposed to the bid, believing the price being offered was too high.
They formed a rebel shareholder group, the Prudential Action Group, which planned to oppose the deal at a shareholder vote due to be held on 7 June.
That vote will not now be held.
Prudential chairman Harvey McGrath said the firm had taken heed of its investors wishes.
"We listened carefully to shareholders over the price and initiated a renegotiation of the terms with AIG," Mr McGrath said.
"Unfortunately, it has not been possible to reach agreement... we are therefore withdrawing from the transaction."
The collapse of the deal is expected to raise questions about the future of both him and his chief executive, Tidjane Thiam, with the company.
One of the Pru's bigger shareholders, Robert Talbot, chief investment officer at Royal London Asset Management, said some hard thinking was now needed.
"There certainly needs to be a proper review as to how the board came to the decision that this was the right deal at the right price - and who most strongly proposed that particular transaction," Mr Talbot told BBC Radio 4's Today programme.
The BBC's business editor, Robert Peston, said the deal was "an important event in the history of British stock market capitalism".
"It shows that conventional investment institutions are prepared to act more like the independent owners of a business and not as absentee landlords too readily compliant with the wishes of managers," he said.