LONDON: Swiss-based mining giant Xstrata on Thursday scrapped its plans to merge with rival group Anglo American, saying it had "no intention" of making a hostile offer and will seek growth elsewhere. "Xstrata today announces that it has no intention of making an offer for Anglo American," the firm said in an official statement on the London Stock Exchange. The Swiss group had approached Anglo American in June with a merger proposal to create one of the world's biggest miners with a combined market capitalisation of 68 billion dollars (43 billion pounds, 46 billion euros). However, Anglo American has dismissed the proposal as "totally unacceptable" and consistently rejected the deal. "It is regrettable that the board of Anglo American immediately rejected our approach, without engaging with Xstrata to investigate the potential to create more value than either company could alone," said Xstrata Chief Executive Mick Davis. He added: "Our decision not to proceed with an offer before the deadline imposed by the UK Takeover Panel reflects our disciplined approach to growth and our focus on the value proposition for Xstrata's shareholders in a merger." Earlier this month, Britain's Takeover Panel watchdog had set Xstrata an October 20 deadline to make a formal offer for Anglo American. Xstrata's decision means that the company must now wait at least six months before returning with a new offer for Anglo under British takeover rules. Despite ditching the bid plans, Davis also argued that the merger of Anglo American and Xstrata had represented a "compelling" prospect. "Nonetheless, the compelling strategic rationale for a merger of the two companies remains undiminished and has been recognised by shareholders of both companies," he said. Anglo American is a diversified group that produces platinum, coal and base metals such as copper, zinc and nickel. It also has a 45-percent stake in De Beers, the world's largest diamond company. The group is the biggest mining company in South Africa and generates around two thirds of its earnings there. The potential tie-up between Anglo American and Xstrata had been the latest sign of consolidation pressure in the mining sector after the collapse of a deal by Rio Tinto with a Chinese firm earlier this year. ETX Capital trader Manoj Ladwa said that Anglo's immediate rejection meant that the merger bid could not get off the ground. "With the Takeover Panel deadline looming Xstrata has decided to keep its powder dry rather than come in with an increased offer for Anglo American," Ladwa said. "Though there was considerable shareholder interest in the deal, the decision to go public by Anglo in its immediate dismissal of the offer made it hard to get a merger through." "However, the compelling strategic logic behind consolidation in such a capital intensive industry remains. Expect Xstrata to look elsewhere potentially (platinum miner) Lonmin."