The news surprised investors, leading to a sharp sell-off in shares of both companies. By the end of the New York trading day, Monsanto stock was hammered down 26.55 per cent, or $13.38, to $37, and AHP stock fell 10 per cent, or $5, to $45.

While neither company would elaborate beyond a brief statement saying the deal was not in the best interest of their respective shareholders, analysts said they had no doubt that it came down to management friction.

"You can read whatever you want into it, but certainly it was a matter of management control. Who has what to say and when? That is always a problem in supposed mergers-of-equals," Southeast Research Partners analyst Neil Sweig said.

Under the agreement, AHP shareholders would have kept their shares, while Monsanto shareholderswere to receive 1.15 shares in the new company for each share held. Monsanto shareholders would own about 35 per cent of the combined company's shares.

On May 29, the last trading day before the agreement was announced, Monsanto shares closed at $55.375 and American Home ended at $58.3125.

In the US Securities and Exchange filing describing the transaction, Monsanto reported just less than 600 million shares outstanding in May and AHP said it had 1.31 billion shares out.

Based on the number of shares listed in the filing, news of the merger termination lead to a combined market capitalisation loss on Tuesday off nearly $14.6 billion -- $8.025 for Monsanto and $6.55 billion for AHP.

In an interview with Reuters, Monsanto chairman Robert Shapiro declined to elaborate on why the deal was scuttled.

"It makes a great deal of sense to get focused on the future and not to spend a lot of time digging around into who did what to whom, when," Shapiro said.

Monsanto, based in St. Louis, announced plans lastsummer to acquire leading seed makers including DeKalb Genetics Corp. and Delta and Pine Land Co., both at steep premiums. The deals are awaiting regulatory approval.

In related trade, Delta shares tumbled 26 per cent, or 10-1/8, to 28-3/4.

"Obviously, we've paid some prices that by historical standards are pretty rich for those (seed) businesses and we've got a lot to prove there," Shapiro said. "We've got to get to work at that.

"We've been investing for years in trying to create a nag-biotech business and a thriving pharmaceutical business," Shapiro said. "That's the immediate task in front of us -- bringing those products quickly through the pipeline and into the market place and marketing them effectively around the world."

A spokesman for American Home Products, based in Madison,- N.J., said chairman and chief executive John Stafford was not available to comment on the deal's termination.

Under the "merger-of-equals" agreement, Stafford and Shapiro were to be co-chairmen and co-CEOs.

The AHPspokesman said neither company would be liable to each other for break-up fees, and said AHP is not now searching for anther merger partner, but remains open to opportunities.

It was AHP's second stumble at the merger altar this year. On January 30, SmithKline Beecham Plc unexpectedly cancelled its merger talks with AHP after 10 days of courtship.

The same day, SmithKline announced it had jilted AHP in order to court its Britain-based Glaxo Wellcome Plc with the hope of forming the world's largest pharmaceutical company.

That romance also foundered, however, when the talks btween SmithKline and Glaxo collapsed acrimoniously on February 23 -- with SmithKline accusing Glaxo of reneging on carefully worked out merger plans.

The Monsanto merger would have allowed AHP to catapult its important crop-protection business into the genetics age by acquiring the agricultural biotech expertise of Monsanto, known for its insect- and pesticide-resistant seeds.

It would also have given AHP claim to the promisingdrug pipeline of Monsanto's G.D. Searle pharmaceuticals unit -- especially a novel pain and arthritis drug known as Celebra (celecoxib) now awaiting approval from the US Food and Drug Administration.

Celebra, like a potential rival prescription compound Vioxx being developed by Merck & Co., is believed to block pain without causing ulcers and gastrointestinal problems common to existing therapies.

Monsanto had previously assigned co-marketing rights to Pfizer Inc. for Celebra, a drug that analysts have said could eventually capture annual sales of more than $1 billion.

"If AHP has lost anything by losing Monsanto, it has lost potential co-marketing rights to this potential blockbuster drug," ABN-AMRO drug analyst James Keeney said.