International Paper has scrapped plans for an €8.9bn takeover offer for Dublin-headquartered packaging giant Smurfit Kappa, blaming a lack of engagement from its board.
US-listed International Paper confirmed it was walking away from a potential deal months after putting forward a sweetened bid to its rival.
"The company will not make an offer for Smurfit Kappa Group, given the lack of engagement by Smurfit Kappa's board of directors and management," International Paper said in a statement.
It means scrapping a proposal first tabled in March of €25.25 in cash and 0.3028 of new shares in International Paper, per Smurfit Kappa share.
The proposal had been sweetened from its initial approach made earlier that month.
It valued each Smurfit Kappa share at €37.54 versus the previous offer of €36.46.
Smurfit had rebuffed the proposed bid, saying it failed to reflect its true value.
Chairman and chief executive of International Paper Mark Sutton said: "While we continue to believe in the strategic and financial potential of this combination, our commitment was to proceed in a disciplined manner that would create value for both sets of shareholders.
"Moving forward, we remain focused on executing our strategy and are excited about our outlook.
The news sent Smurfit Kappa shares to the top of the FTSE 100.
Its stock price rose as much as 6% before dropping back to trade higher by around 3.3%.
Smurfit Kappa's board said it believes the company has "superior prospects as a standalone business".
Chief executive Tony Smurfit said the business would drive ahead with its medium-term plan which includes the acquisition of Reparenco - a privately owned Dutch paper and recycling business it snapped up for €460m last month.
"The acquisition of Reparenco will have a positive impact on our integrated model and we are targeting delivery in excess of €30m of synergy benefits," Mr Smurfit said.
"We expect the second quarter to represent another strong performance and we will provide a further update at the time of our half-year results on August 1."