The EU blocked the blockbuster merger of the London Stock Exchange with Germany's Deutsche Boerse on Wednesday, snagged by competition concerns and the fallout from Brexit.
The decision was widely expected after the LSE last month said it had refused the European Commission's request to divest its majority stake in Italian trading platform MTS.
The EU's veto came on the day that Britain was to officially trigger its divorce process from the EU in which the fate of the London finance hub is a major concern.
"As the parties failed to offer the remedies required to address our competition concerns, the commission has decided to prohibit the merger," said EU Competition Commissioner Margrethe Vestager.
The commission said the sale of MTS would have prevented a monopoly in the trading of bonds and provided a "clear cut remedy to meet these concerns."
LSE had agreed to offload the French arm of clearing house LCH to European rival Euronext for 510 million euros ($550 million) in order to allay those fears, but Vestager said this fell short.
LSE on Wednesday said it had abandoned the sale of LCH.
The companies' refusal to sell MTS came amid reports that the tie-up was put under too big a pressure over fears of the consequences of Brexit.
The massive merger was unveiled to much fanfare last year and vigorously backed by both sides even in face of Brexit.
- Regrets decision -
But concerns grew in Germany after it was revealed that the merged company would be headquartered in a soon to be non-EU London and not Frankfurt.
"Brexit effectively killed this deal off nine months ago so it's fitting that Vestager delivered the 'coup de grace' just a couple of hours before the UK triggers Article 50," said analyst Neil Wilson from ETX Capital in London.
"The London Stock Exchange's future looks to be, like Britain's, outside of Europe," he added.
The proposed tie-up also drew criticism from France, Belgium, Portugal and the Netherlands, fearful for the future of their own stock exchanges, owned by Euronext.
It is the third time that the Frankfurt and London stock exchanges have tried to tie the knot, following two unsuccessful attempts in 2000 and 2005.
The development could now reignite interest from US-based global markets operator Intercontinental Exchange -- owner of the New York Stock Exchange -- which had decided against bidding for the LSE last May.
Deutsche Boerse, which also operates the Luxembourg-based clearing house Clearstream and the derivatives platform Eurex, said it regretted the decision but still had global ambitions despite the failure.
"We will continue to pursue our growth strategy, to strengthen our innovation capabilities and to even better serve market and customer needs," Carsten Kengeter, CEO of Deutsche Boerse said in an email.
German authorities also helped scupper the deal last month when they opened a probe into suspicious stock purchases by Kengeter, shortly before the announcement of the planned merger with LSE.