Drinks giant Diageo has called time on its bid to buy Mexico's Jose Cuervo tequila brand, ending year-long talks.
It had been expected to acquire Cuervo, the world's biggest tequila brand, from Mexico's wealthy Beckmann family for more than $3bn (£1.9bn) but today admitted the talks had ended.
Diageo said both companies would now ensure "an orderly termination" of its long-standing distribution agreement at the end of June 2013 to sell Cuervo outside of Mexico.
The failed deal marks a rare hiccup for Diageo, which has sailed through the global downturn with almost uninterrupted demand for its brands and a series of acquisitions.
The company last month said it plans to acquire 53.4 per cent of United Spirits for almost £1.3bn to give it control of the Vladivar vodka and Whyte & Mackay whisky brands in the fast-growing Indian market.
Diageo has also completed deals for Brazilian, Turkish and Chinese distillers during the past two years.
The Beckmanns are understood to have valued Cuervo at up to $500m more than Diageo, with the UK firm believing a significant investment was required to turn around falling sales in North America, and improve margins.
Diageo chief executive Paul Walsh said: "It has not been possible to agree a transaction which delivers value for Diageo's shareholders and therefore, by mutual agreement, we have terminated our discussions."