Penske Automotive Group Inc. said last week that it has reached a mutual agreement to terminate its planned acquisition of Rallye Motors, Thompson Financial reported.

The transaction was expected to close in the first quarter of 2008.

"Upon further evaluation, we mutually agreed with Penske Automotive to terminate the proposed transaction. Our priority continues to be to serve our clients and build on our position as the premier luxury car retailer on Long Island," Juliana Terian, Rallye Chairwoman, said in a statement.

Penske noted it has completed acquisitions in 2007 that are expected to generate about $450 million in gross annualized revenue.