Gus angers Tio by intervening with the Cartel on Walt's behalf, and the Cousins grow so impatient that Gus steers them to Hank instead. Gus then double crosses the Cousins by warning Hank of the hit. Gus takes obvious pleasure informing Tio, who's now in a nursing home, that both his nephews died following the ambush.
Gus, it turns out, is pursuing vengeance of his own: In Mexico in 1989, Tio murdered Gus's first meth partner and then forced Gus to watch the man die. "Look at him. You did this to him," taunted Tio at the time.
After Gus poisons Don Eladio and other Cartel members in Mexico, he returns to the nursing home to announce their deaths and that of Tio's grandson. "Now the Salamanca name dies with you," sneers Gus.
Walt convinces Tio to put aside their mutual hatred to take revenge on Gus. Tio lures Gus to the nursing home by appearing to inform to the DEA when he maneuvers a meeting with Hank. Once Gus is there, Tio detonates a bomb attached to his bell, killing Gus, Tio and Gus's operative Tyrus in the blast.