Dutch operator KPN has dropped plans to find a merger partner for E-Plus in Germany, a strategy it adopted to ward off the hostile bid by America Movil. KPN is thought to have been in talks about merging E-Plus with Telefoncia’s O2 subsidiary in Germany but was thwarted by what the Dutch operator says in a statement was “the current adverse conditions in financial markets”.  The two companies are thought to have been in talks for several weeks.

E-Plus and O2 are the third and fourth largest mobile operators in Germany respectively. A merger would have made a powerful competitor to market leaders T-Mobile and Vodafone. KPN hoped a merger or sale of E-Plus would unlock value of the German business and so deter shareholders from supporting America Movil’s unwanted bid.

The Mexican group has made an offer for up to 28 percent of KPN’s stock. The offer expires on 27 June. KPN’s share price has fallen 21 percent within the last year.