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Samsung Heavy Industries CEO Dae-young Park. Image courtesy of Samsung Heavy Industries.

Korean shipbuilder Samsung Heavy Industries (SHI) scraped its $2.5 billion planned takeover of Samsung Engineering Thursday after shareholders opposed the deal.

SHI officially announced the acquisition of its sister company in early September.

Stocks in both companies tumbled since the announcement with shareholders demanding a combined $1.5 billion in buybacks.

SHI wanted to acquire Samsung Engineering about $2.47 billion in shares and would have issued 94 million new shares to the company.

The merger was part of a larger effort to simplify Samsung’s shareholding structure as the company prepares for a transfer of power from current chief Lee Kun-hee to his children, Reuters said.

The companies promised to cancel the deal if buy back costs exceeded $370 million for Samsung Engineering or $850 million for SHI.

Samsung Engineering shareholders wanted to sell $630 million worth of shares and SHI shareholders wanted a $830 million buy back.

Both companies said they could possibly reconsider the merger after “taking into account the market situation and shareholder opinions.”

The two companies had combined sales of about $20 billion in 2013.