India's top private airline Jet Airways Ltd. said on Tuesday it had decided for commercial reasons not to go ahead with a $500-million deal to acquire smaller rival Air Sahara.
Jet struck a deal in January to buy Air Sahara from privately owned conglomerate the Sahara group and extended the deal deadline by three months in March when it did not get regulatory approval for the purchase.
The extended deadline fell on June 21. Jet did not say at the time the deal was officially off although its shares gained as much as 9 percent on June 22 as media reports said it had fallen through.
Jet said in a statement on Tuesday the deal had been subject to conditions, including some related to government permissions and policies on mergers and acquisitions of airlines.
It said the extended deadline had expired before the conditions had been met.
"For commercial reasons, and in the interest of Jet Airways and its family of shareholders, the management decided not to extend the time," it said.
Sahara officials could not be reached for comment.
The proposed deal would have given the merged airline about half of India's domestic market, with a fleet of about 70 aircraft that also fly routes to other parts of Asia and London.
Sahara, which began operations just months after Jet in 1993, is part of the $12-billion Sahara group owned by flamboyant tycoon Subroto Roy, with interests spanning financing, housing, power generation and media.