China Rongsheng Heavy Industries Group, a privately-owned shipbuilder, announced Wednesday that it has officially cancelled its planned acquisition of Anhui Quanchai Engine Co, a multi-cylinder engine maker, citing adverse market conditions.

China Rongsheng announced in April 2011 its intentions to acquire Anhui Quanchai for 2.15 billion yuan ($337.55 million).

However, Hong Kong-listed China Rongsheng reported an 82 percent drop in its first-half profits Tuesday due to a decline in demand for new vessels. The company is also concerned about a slowdown in global shipping activity thanks to Europe's ongoing debt crisis.