NEW YORK -- Nasdaq and IntercontinentalExchange are withdrawing their proposed $11 billion bid for the parent of the New York Stock Exchange after recognizing they would not receive regulatory approval for the transaction and could potentially face a lawsuit attempting to block the deal.
The decision clears an obstacle to NYSE Euronext's previous $10 billion deal to combine with the German exchange operator Deutsche Boerse.
Nasdaq OMX Group and IntercontinentalExchange said Monday that they held unsuccessful talks with the antitrust division of the Justice Department about their joint bid for NYSE Euronext.
The Justice Department said it informed the companies the government would file an antitrust lawsuit to block the deal, as it believed the acquisition would have substantially eliminated competition for corporate stock listing services and other data products.
Shares of NYSE Euronext dropped $3.99, or 9.8 percent, to $36.90 in pre-market trading, while Nasdaq OMX stock fell 31 cents to $26.60. Shares of Atlanta-based IntercontinentalExchange gained $3.68, or 3.1 percent, to $122.
Nasdaq OMX CEO Bob Greifeld said in a statement that the companies had offered a variety of "substantial remedies" to try to secure regulatory approval, including the sale of the NYSE Self-Regulatory Organization and its related businesses.
"While we are surprised and disappointed in the antitrust division's conclusion, some of the uncertainty, at least as it relates to our joint proposal, has been resolved," he said.
The announcement comes one week after Nasdaq and ICE reached out directly to NYSE Euronext shareholders, issuing a letter saying that the NYSE Euronext board was rushing a vote without exploring better alternatives.
The board had twice rejected the Nasdaq and ICE bid in favor of the Deutsche Boerse offer despite the lower price.
NYSE shareholders are scheduled to vote in early July on the merger with the German company.