Telenor (TEL.OL) and Malaysia’s Axiata Group (AXIA.KL) have ended talks to create a telecoms joint venture with nearly 300 million customers across South Asia and Southeast Asia in a blow to the Norwegian group’s growth strategy and shares.

Shares in Telenor, which has expanded in Asia in pursuit of growth outside its mature home market in Scandinavia, fell on Friday’s announcement by the two companies that talks were over.

“This removes the prospect for $5 billion of potential deal synergies,” brokerage Jefferies said in a research note.

Telenor sold its central European operations last year as it seeks to focus on its Nordic and Asian businesses.

The proposed non-cash combination of Telenor’s telecom and infrastructure assets in Asia with Axiata’s would have had operations in nine countries including Thailand, Malaysia, Bangladesh, Pakistan and Indonesia, with a total population of nearly 1 billion people.

Failure of the talks also highlights the difficulty of merging phone operators around the world and the growing problems it presents for investors.

The joint venture would have competed with firms such as Singapore Telecommunications (STEL.SI) and created an entity worth $40 billion including debt, a person with knowledge of the matter told Reuters in May when the talks were first announced.

Telenor said in a statement that both parties had agreed to end the discussions “due to some complexities involved in the proposed transaction”, without giving further details of what had scuppered plans for the largest such cross-border deal in Asia, excluding China and Japan.

However, Telenor left the door open to a deal with Axiata, saying both companies “still acknowledge the strong strategic rationale” of the combination and “do not rule out that a future transaction could be possible”

Shares in Telenor were down 4.2% at 0931 GMT, lagging a flat European STOXX 600 Telecoms index .SXKP. Axiata shares were trading up 2.3% before being halted, pending the news.

“It has been a theme among investors that this deal could have created fair amount of value,” said Stefan Billing, analyst at Kepler Cheuvreux.

“Telenor and Axiata have been talking about synergies, and there has also been expectations on a high valuation of the planned listing, so it’s natural that there is a bit of disappointment initially.”

The Norwegian mobile operator was to have owned a 56.5% stake and Axiata the remaining 43.5% with no cash changing hands, the companies had previously said.

“The Board acknowledges the strong strategic rationale of the proposed transaction and is equally cognizant of the level of complexity of such a deal,” Axiata Chairman Ghazzali Sheikh Abdul Khalid said in a statement, only days after the Malaysian company said the deal was on track.

Axiata was not immediately available for comment on Friday, while Telenor declined further comment.