TOKYO- Japanese beverage giant Kirin and its smaller rival Suntory said Monday they had scrapped plans to merge and create one of the world's largest beer and soft-drink companies.

Kirin, Japan's top brewer, said the two firms disagreed over whether the merged company would be publicly listed, while privately held Suntory cited discord over how control would be split between the long-time rivals.

The merger talks started in July as both firms expanded aggressively overseas at a time when their home market is declining due to a shrinking population, an economic downturn and changing consumer tastes.

A merger would have been the largest in the Japanese beer and soft-drink markets and would have rivaled sales of beverage empires such as Belgium-based Anheuser-Busch InBev and Coca-Cola Co. of the United States.

Kirin president Kazuyasu Kato told a news conference that the company would seek another merger partner as part of its global strategy, without naming a possible candidate.

Tokyo-based Kirin on Monday broke the news that talks had collapsed.

"Kirin Holdings Company Limited, which has been in merger negotiations with Suntory Holdings Limited, today announced that the negotiations have been terminated," the company said in a statement.

Kirin said that it had been talking with Suntory "on the premise that the new entity would be managed as a listed company in order to ensure appropriate management independence and transparency".

However, Kirin said that Suntory held a different view, and that therefore the talks were "unlikely to result in the establishment of a company that would fulfil Kirin's aim of developing as a leading global company".

"Kirin therefore decided to terminate the negotiations," it said.

Suntory, a major whisky maker that is the country's number three brewer after Kirin and Asahi, said the two parties "could not bridge the gap on the merger ratio and other factors".

The Suntory family, which established the company in 1899, retains a stake of nearly 90 percent.

Reports said it may have gained a controlling share of more than 30 percent in a merged company.

In a statement, Osaka-based Suntory said it had "decided that it would be difficult to build a new entity in the style that our company has pursued, judging from the negotiations".

Its president Nobutada Saji said Suntory "will continue taking on challenges to become a leading general beverage and food company to grow in the global market".

Suntory agreed last year to acquire Europe's privately held Orangina Schweppes Group for about 3.3 billion dollars, in what was the year's largest purchase by a Japanese company of a foreign firm.

Kirin, set up in 1907 and known primarily for its beers, has bought Australian brewer Lion Nathan and a chunk of San Miguel's brewing business in the Philippines.

Kirin's shares dived on the news Monday, shedding as much as 8.5 percent in afternoon trade to 1,321 yen (14.78 dollars).