Michael Sheen Wasn't Ready to Settle Down with Rachel McAdams: Source

Rachel McAdams, Michael Sheen: Why They Split
Michael Sheen and Rachel McAdams in April 2012
Karwai Tang/Landov

03/01/2013 AT 07:00 AM EST

There's no bad blood between Rachel McAdams and Michael Sheen. The exes simply "have different visions for the future," a source tells PEOPLE about the pair, whose split was confirmed on Wednesday after two years of dating.

"Rachel wants to settle down and is dreaming of having a family. Michael always seemed content with their relationship. Since he already has a daughter [Lily, 14, with Kate Beckinsale], he feels no need to have more children. He wants to focus on his career."

"They still have some contact and are friendly," the source adds, but it was their differences that eventually led to the demise of their relationship.

"They tried to work things out, but at the end they just couldn't agree," the insider says. "It caused some frustration and they thought it was better to go separate ways."

McAdams, 36, and Sheen, 44, first met on the set of Woody Allen's 2010 romantic comedy Midnight in Paris. They acknowledged their romance in 2011 by walking arm-in-arm at the Cannes Film Festival.
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