Swedish truckmaker Scania has rejected a 9.6bn euros ($12.2bn; £6.5bn) takeover bid from German rival MAN.
A successful deal would create Europe's largest truckmaker
A successful deal, which Man first said it was considering last week, would need the approval of Scandia investors including car giant Volkswagen.
Analysts have predicted consolidation in Europe's truck sector to allow firms to better compete at a global level.
Man's shares fell after the bid was rejected, closing down more than 5% in trading on the Frankfurt stock market.
Scania said its board had unanimously rejected the bid offer.
Man is currently the third-largest truckmaker in Europe, while Scania holds fourth place.
Were the firms to merge, it would create Europe's leading truck firm.
Volvo is currently the market leader in Europe, with DaimlerChrysler in second place.