The proposed merger between ForFarmers and 2 Agriculture has been dropped by the firms following concerns such as the costs involved and the impact of it on farmers.
The companies said in a statement that the plan had been 'abandoned' after taken into consideration numerous issues.
Last month, the Competition and Markets Authority (CMA) had referred the joint venture between ForFarmers and 2 Agriculture for an in-depth investigation.
Netherlands-based ForFarmers and 2 Agriculture, owned by UK company Boparan, both manufacture and supply chicken and other types of poultry feed in the UK.
The companies planned to combine their animal feed milling operations in a joint venture. Between them, the firms operate 19 mills across the UK.
Following its investigation, the CMA found that the deal raised competition concerns in four local areas across East Anglia, north-western England and North Wales.
The watchdog added that the deal could lead to higher prices for poultry feed, lower quality feed or worse quality of service.
Sorcha O’Carroll, senior director of mergers at the CMA, said: "Feed is the biggest expense faced by farmers when rearing chicken, the UK’s favourite meat.
"With food prices already increasing and the wider cost of living crisis, it is vital that we don’t allow a reduction in competition between poultry feed suppliers, which could make this situation worse - both for farmers and shoppers."
In their statement, 2 Agriculture and ForFarmers said the plans had been abandoned, but added that the venture would have made for a 'robust business'.
"The parties have taken into consideration, among other things, the current impact on their respective businesses, the costs involved, the impact this process has on both employees and farmers."
"2 Agriculture and ForFarmers UK continue to believe that the joint venture would have made for a robust business, with improved expertise and presence across species.
"The proposed joint venture would have invested in driving improvements and optimising services in the most efficient manner, with a focus on further improving production efficiency and feed quality."
