The expected merger between OCI Group and Hanmi Group has been called off after a general meeting of shareholders at Hanmi Science, the holding company of Korea's leading drug firm Hanmi Pharmaceutical, on Thursday.

The management conflict within the founding family has also temporarily ended as Lim Jong-yoon and Lim Jong-hoon, the first and second sons of founder Lim Sung-ki, secured enough seats on Hanmi Science’s board to stop the merger.

"(OCI) humbly accepts shareholders' decision, and the whole merger process will stop. (We) wish Hanmi Group the best in all its future endeavors," said OCI Chair Lee Woo-hyun after the general meeting of shareholders.

The announcement was made after the current management team, led by Hanmi Group Chair Song Young-sook and her daughter and Hanmi Science President Lim Joo-hyun, failed to secure a majority in Hanmi Science's board with nine seats.

Previously, the management team proposed six candidates for election to the board, appointing Lim Joo-hyun and Lee Woo-hyun as inside directors. Song and her daughter planned to process the merger after winning a majority in the board.

Song and her daughter gained a slight upper hand in the management conflict as they secured support from the National Pension Service, which holds a 7.66 percent share in Hanmi Science. With the NPS and their other allies’ support, Song and her daughter were able to secure a 42.7 percent share in favor of the merger.

On the other hand, the Lim brothers reportedly garnered 40.6 percent of the shares, around two percent lower than Song and her daughter’s side.

While none of the two sides of the founding family held a majority in Hanmi Science shares, small shareholders, who hold about 20.5 percent of the holding company, voted in favor of the Lim brothers on Thursday, allowing the Lim brothers and their three aides to enter the board.

Many small shareholders are known to have voted against the current management as they believed that Song and her daughter would leverage the merger to resolve inheritance tax issues.

Lim brothers also previously argued against Song and their sister not using the merger for personal interests.

“My mother and sister could have been disappointed by the result, but we want to move forward together with them,” Lim Jong-yoon said after Thursday's general meeting of shareholders. They also expressed gratitude to shareholders who voted in favor of them and pledged to execute proactive shareholder return policies shortly.