Rural servicing company PGG Wrightson is not ruling out the possibility of future merger talks with the deer velvet co-operative Velexco.
Velexco has announced that the negotiations have fallen through.
The talks looked at forming a joint venture with PGG, which would have included private company Tasman Velvet Processors, to handle more than 70% of the velvet produced in New Zealand.
The aim would be to create a selling and marketing platform for deer velvet.
PGG Wrightson Velvet general manager Conrad Wilkshire says when the merger negotiations broke down, Velexco offered to buy PGG's velvet business.
Mr Wilkshire says the offer came in late, and was very different from anything discussed previously.
He says PGG didn't feel Velexco was in a position to leverage that type of investment, but is not ruling out future talks.