Kirin President Kazuyasu Kato and Suntory President Nobutada Saji held last-ditch discussions in Tokyo on Monday to try to salvage plans to form one of the world's biggest beverage makers.

However, the companies could not narrow their differences over the merger ratio and other conditions of the tie-up, such as the degree of influence Suntory's founding families would have over the running of a potential new company.

"We continued the negotiations in the belief that a merger would play a major role in helping us to survive in a competitive global market," Kato said at a press conference following the collapse of the talks. "However, the companies couldn't reach an understanding on how the new company would be run. It's regrettable in some ways."

But looking to the future, Kato added, "We'll harness the strengths of the Kirin Group and strive for qualitative expansion."

Suntory's Kaji said to reporters Thursday evening: "It's a shame. Our thinking differed on such matters as (the founding families') degree of influence and involvement in the running (of the envisioned company)."

Revelations that Kirin, the nation's largest distiller, brewer and beverage maker, was in talks with Suntory, the nation's second largest, surfaced in July.

The two companies hoped their tie-up would help expand their overseas businesses operations at a time when the domestic market is feeling the squeeze due to a shrinking, aging population, among other reasons.

The envisioned company would have been one of the largest alcoholic and soft drink makers in the world, with a 50 per cent share in the domestic market for beer and other drinks. Its annual sales would have been about 3.8 trillion yen, calculated based on their sales during the business term ending in December 2008.

The beverage makers initially intended to launch their new company in April 2011 and retain the Kirin and Suntory brand names.

However, the negotiations soon became bogged down over the share of the new company's stocks to be held by Suntory's founding families, who possess about 90 per cent of Suntory's shares. This intractable disagreement could not be overcome.

Suntory's founding families had insisted on a more than one-third stake in the new company and the right to continuous influence on the management of the planned company.

Kirin, which is listed on the Tokyo Stock Exchange, judged that a merger would bring problems regarding the transparency and independence of the management of the envisioned company, which also would have been listed.