UK insurer Hastings Insurance Group PLC (LON:HSTG) said talks to combine its business with AA plc's insurance division have ceased.
In two separate statements, the companies confirmed media reports about holding discussions about a potential deal.
AA said the two held preliminary talks in summer to explore a merger of its insurance arm with Hastings.
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“The AA regularly reviews all strategic options, including whether a spin-off of any of its business lines would unlock further value and be in its shareholders' interests,” the group said.
Hastings said the talks have now ended.
“Whilst Hastings regularly reviews selective acquisition opportunities, its core strategy remains to deliver on its organic growth and its disclosed targets.”
The AA is still looking to spin out its insurance division, according to the Financial Times, which first reported on the plan.
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The plan had caused a rift between members of AA’s board. Bob Mackenzie was dismissed as AA’s chairman for “gross misconduct” after a physical altercation with insurance boss Michael Lloyd last month.