(Yicai Global) Aug. 6 -- Shanghai Electric Group has axed plans to take a 51 percent stake in Jiangsu Zhongneng Polysilicon Technology Development, the main operating unit of the world's largest solar panel materials maker GCL-Poly.

The companies were unable to agree on terms, Shanghai Electric said in a statement on Aug. 3, adding that both parties felt the timing was off and mutually agreed to end the deal. As the target is such a large company, the division of assets made the transaction complicated, the statement added.

The firm announced plans for the acquisition in early June, valuing Jiangsu Zhongneng at around CNY25 billion (USD3.7 billion).

One insider believes that the deal came to a head as the pair disagreed on the prospects of China's solar sector after the National Development and Reform Commission, China's top economic planner and price setter, cut subsidies for electricity generated from clean energy by as much as 9 percent from June 1. The NDRC has also suspended approval for new solar power stations in order to focus on technology development, improve cost efficiency to reduce dependence on subsidies.

Jiangsu Zhongneng is the world's largest high-purity polysilicon maker, producing 10,000 tons a year for clients such as Trinasolar, JA Solar and Canadian Solar.

Editor: James Boynton