BEIRUT, May 26 (AFP) - Byblos Bank and Banque Libanaise pour le Commerce (BLC) announced Wednesday the cancellation of their planned merger, delivering a fatal blow to what would have been Lebanon's largest banking deal. A statement from Byblos chairman Francois Bassil and BLC chairman Felix Jean Aboujaoude said the February 1 agreement for BLC to sell its shares to Byblos and plans for the merger were "cancelled." The communique was issued after a meeting Tuesday between Bassil, Aboujaoude and Riad Salameh, governor of the Central Bank of Lebanon. Reasons for the collapse of the merger were not disclosed in the statement and officials from both banks declined to comment. But a banking expert close to the banks said the deal collapsed after Bassil tried to renegotiate the agreement to win a reduction of the 109 million dollars in cash which Byblos had to pay the Aboujaoude family, which owns 52.84 percent of BLC. "It seems Byblos had difficulty in raising the money for the payment and wanted to get out of the deal," a banker told AFP. Another banker said Bassil wanted to renegotiate the purchase price, accusing BLC of delaying the disclosure of its 1998 financial statement to the Bank Control Commission of the Central Bank. On February 1, Bassil and Aboujaoude signed an agreement for a Byblos takeover of BLC, which was due to make Byblos the largest bank in Lebanon. Byblos shares at the Beirut bourse opened Wednesday at the same price of Tuesday's closing at 2.75 dollars while BLC's Global Depository Receipts (GDRs) listed in London went down 9.62 percent to 11.75 dollars. A banker said the collapse of the merger could shake confidence. "The merger would have been the largest banking deal in a long time in Lebanon where authorities have been encouraging a banking consolidation movement," the banker said. "It's collapse will surely shake confidence in future such banking operations." The Central Bank has encouraged Lebanese banks to consolidate in the last five years, reducing the number of banks in the country 76 from 84.  