HICL Infrastructure and The Renewables Infrastructure Group (TRIG) have announced that they will not proceed with the £5.3bn merger deal that was agreed last month.

Despite the deal collapsing, the two firms said they remain convinced of the strategic rationale for the combination, which was set to create the UK’s largest listed infrastructure investment company.

However, following engagement with shareholders, the HICL board stated that it cannot progress with the transaction without a substantial majority of support from its own investors.

This follows CG Asset Management, which owns 18.5 million shares in HICL, stating last month that it saw "no strategic rationale" for the transaction.

HICL stated that each company remains well positioned as an independent business, with "high-quality portfolios, strong management teams and clear strategies for delivering long term value to investors".

Chair at TRIG, Richard Morse, stated: "Our focus now returns to delivering TRIG's attractive standalone strategy. TRIG is a well-established platform with high quality assets, a competitive pipeline of opportunities, and deep renewables and energy storage expertise.

"We are uniquely placed to capitalise on the demand growth for low carbon, reliable power and to capture the commercial opportunities as economies across the UK and Europe electrify and decarbonise. Doing so will allow us to deliver sustainable value and growth for our shareholders, with whom we will continue to engage on the path ahead."

Following the announcement, shares in TRIG fell by over 3%, while HICL's share price increased by 3%.

Investment director at AJ Bell, Russ Mould, said that the merger was "doomed from the start".

He concluded: “It’s no wonder the investment trusts have walked away from a corporate tie-up as it would have been a struggle to get the deal over the line.

"HICL shareholder CG Asset Management was extremely vocal about the deal, calling it ‘value destructive’ and that it had ‘no strategic rationale’. CG rallied together a group of other institutional investors including Hawksmoor and TrinityBridge to oppose the deal. The investors flexed their muscles and made the boards of HICL and TRIG rethink their plan."

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