“The Board of UniCredit announces the withdrawal of its offer for BPM as the condition relating to the golden power authorization is not satisfied,” the company said in a press release, calling it a “missed opportunity” for BPM shareholders.

The surprise announcement — on the eve of UniCredit’s quarterly earnings release — ends a protracted tug-of-war pitting UniCredit against BPM and the Italian government, which opposed the potential takeover.

It also comes hours after Italy’s financial market regulator, Consob, suspended UniCredit’s takeover bid of Banco BPM for 30 days, citing a “situation of uncertainty” around the offer.

“The normal offer process has been impacted by the Golden Power provision insistently advocated for by the leadership of BPM,” UniCredit said.

“As a result, BPM leadership has deprived their shareholders of the dialogue that normally occurs during an offer period to understand the value created by the combination and determine the terms that would be acceptable to them to move forward.”

UniCredit launched its buyout offer for Banco BPM at the end of November, valuing Italy’s third-largest bank at 10.1 billion euros ($11.9 billion).

While Banco BPM considered the move hostile and the offer insufficient, the Italian government of Prime Minister Giorgia Meloni similarly opposed it, as it would have thwarted its plans to create a third banking group in Itay, comprising Banco BPM and Monte dei Paschi di Siena (MPS).

In April, the government exercised its “golden power” provision, which cited national security concerns due to UniCredit’s operations in Russia. The provision allows the government to set certain restrictive conditions on takeovers in strategic sectors, such as banking.

Those included an obligation for Unicredit to maintain the level of loans granted in Italy for a certain period of time, and to cease all activity in Russia.

But the European Commission warned Italy earlier this month that the provision was in potential violation of EU law.

“The continued uncertainty around the application of the Golden Power prescriptions do not benefit” UniCredit shareholders, said Unicredit CEO Andrea Orcel in the statement.

In June, the Commission decided to approve the proposed takeover, following a commitment by Unicredit to divest 209 branches in regions where the merger of the two networks could have raised competition concerns.

Italy suffered a setback earlier this month when the Administrative Court of Rome (TAR) partially ruled in favor of Unicredit, eliminating two of the four requirements that Rome had imposed as part of its restrictions on the takeover.