Initially agreed in October last year, the £37.5 million disposal would have taken place on a cash free, debt free basis.

SIG Building Solutions includes the brands Steadmans, United Roofing Products, Trimform Products, and Advanced Cladding & Insulation. In 2018, the business reported revenue of £60m and operating profit of £3.3m.

Completion of the deal was conditional on completing the Competition & Markets Authority’s clearance process but a Phase 1 investigation from the watchdog found that the deal could leave the merging companies’ customers, typically building contractors, with few alternative suppliers to choose from.

Kingspan and Building Solutions are two of only three key suppliers of standard foam sandwich panels in the UK and would only face serious competition from one other UK-based supplier – Tata Steel – after the deal. Competition from suppliers of products imported from outside the UK and suppliers of other products sometimes used as insulated cladding is also very limited.

The CMA asked the two companies to address the concerns to avoid an in-depth Phase 2 investigation.

But SIG has confirmed that it will no longer proceed with the deal.

SIG said: “As a result of the prevailing market conditions, it has not been possible for the company and Kingspan to agree commercial terms for the extension of the agreement.

“Accordingly, the parties have agreed to terminate the agreement with immediate effect and the disposal therefore will not proceed.

“The company is currently reviewing a number of options regarding the Building Solutions business and will provide further updates when appropriate.”