Clariant, a specialty chemical company based in Switzerland, and Huntsman Corp., a U.S.-based global chemical manufacturer, announced that they have mutually terminated their proposed “merger of equals.”

“We remain convinced that the proposed merger of equals as agreed to on May 21, 2017, would have been in the long-term best interests of all of our shareholders. However, given the continued accumulation of Clariant shares by activist investor White Tale Holdings and its opposition to the transaction, which is now supported by some other shareholders, we believe that there is simply too much uncertainty as to whether Clariant will be able to secure the two-thirds shareholder approval that is required to approve the transaction under Swiss law,” according to a joint statement from Peter R. Huntsman, president and CEO of Huntsman, and Hariolf Kottmann, CEO of Clariant.

White Tale Holdings, the investment vehicle of hedge fund manager Keith Meister, and New York-based fund 40 North, had raised its Clariant stake to above 20% before this announcement. They contended that the merger would not deliver enough benefits, while exposing Clariant to Huntsman’s debt and volatile commodity chemicals business.

“Under these circumstances and in light of the high level of disruption and uncertainty that has been created for both companies, we have jointly decided to terminate the merger agreement. This will allow both companies to focus again fully on their respective stand-alone strategies in the best interests of the companies and their shareholders, associates, and other stakeholders.”

Clariant and Huntsman in May struck an agreement that would have given Clariant 52% of the combined entity. The USD20 billion deal would have created the world’s second-biggest specialty chemicals maker after Germany’s Evonik Industries AG.

Both Clariant and Huntsman agreed to forgo breakup fees. Clariant had faced a potential USD210 million deal breakage fee and a USD60 million fee had Clariant shareholders failed to approved the transaction.