German stock exchange operator Deutsche Boerse received a fresh blow to hopes of growing through acquisition after its Swiss rival rebuffed an invitation to merger talks on Friday.
Shortly after the markets closed, the Swiss SWX stock exchange announced that it had decided not to pursue merger discussions with its bigger German counterpart, confirming what sources close to the situation had said in an earlier Reuters story.
SWX was, however, prepared to consider other forms of co-operation with the German exchange, it said.
"The board ruled out for the time being any sale, merger or total integration of the SWX Group into another securities exchange organisation," the Swiss stock exchange said in a statement.
"It ... will remain open to discussions on potential affiliations," it added.
Deutsche Boerse said it would intensify its examination of areas for further co-operation.
The announcement followed a meeting of the SWX board to decide how to respond to the merger offer contained in a secret letter that many analysts described as a take-over bid.
But the Swiss bankers that control the exchange had been reluctant from the outset, many seeing such a deal as a threat to Swiss regulatory independence and banking secrecy.
A fusion of the two would have given Deutsche Boerse full control of Eurex - the world's biggest futures and options exchange - and created Europe's third-largest stock market. Both exchanges now co-operate in running Eurex.
The failed bid will increase pressure on Deutsche Boerse boss Werner Seifert, said one analyst who asked not to be named. The German exchange has already tried to merge with London's stock exchange.
"The pressure on Seifert will definitely be bigger as a result of this," he said. "Deutsche Boerse will find it difficult to justify not redistributing its extra capital to shareholders without taking a big step like this."
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