(Reuters] – British Airways and Iberia owner IAG are set to cancel their acquisition of Air Europa rival from private Spanish company Globalia. The group announced Wednesday.

Globalia (LON) and International Airlines Group confirm that today, they have entered an advanced stage of negotiations to terminate the agreement,” Stephen Gunning, IAG’s finance chief, said in a statement.

IAG paid 500 million euros (or $5563.6 million) for the purchase of the airline. This was after the COVID-19 pandemic had reduced the price by half. IAG also reached a deal with IAG to delay payments for six more years.

Air Europa offers connections to Latin America and European destinations.

IAG stated that the agreement would increase the competition of the Madrid hub as well as benefit the consumers.

However, competition regulators were worried that the agreement would decrease competition on the Spanish market as well as international routes into the country.

Sources claim that the IAG’s proposed solutions – 13 medium and short-haul routes, and 2 long-haul routes from Madrid and Barcelona airports to be abandoned – did not suffice to address concerns.

($1 = 0.8872 euros)