Pedestrians pass by the office of HKEX in Hong Kong. File photo: VCG

Hong Kong Exchanges and Clearing Limited (HKEX) said Tuesday it would not proceed with a proposal to the London Stock Exchange Group plc (LSEG) to combine the two companies.

The HKEX said it still believes that the combination "is strategically compelling and would create a world-leading market infrastructure group" but is disappointed that "it has been unable to engage with the management of LSEG in realizing this vision."

The London bourse announced the rejection decision soon after the HKEX made the merger proposal on Sept. 11.

HKEX Chief Executive Charles Li said dropping the bid was a hard but rational decision in the interest of its shareholders, adding that there were previous cases of merger realized through other means after rejection of the initial proposal.

Li said the HKEX would not ease its global pace after giving up the bid.

The HKEX has delivered a 207-percent increase in its share price and Total Shareholder Returns of 315 percent since the start of 2009, which it said reflects the fundamental strengths of its business and its ability to adapt in the global industry.