The Nasdaq OMX Group and IntercontinentalExchange are withdrawing their bid for NYSE Euronext, after antitrust regulators said the deal would not gain the necessary approvals.

"We took the decision to withdraw our offer when it became clear that we would not be successful in securing regulatory approval for our proposal despite offering a variety of substantial remedies."   - - Nasdaq CEO Robert Greifeld.

The move is a disappointment for NYSE Euronext shareholders, who had expected the rival bid would to at least extract a higher offer from Deutsche Börse.  Shares of NYSE Euronext were down more than 10%.  Shares of Nasdaq were down 2.3%.  Nasdaq and ICE had been offering $11.3 billion for NYSE Euronext - above the $10 billion friendly merger agreement that Deutsche Börse arranged in February.

    Discussions with Justice Department.    Following discussions with DOJ's antitrust division. the two exchanges decided to pull their offer for NYSE.  Nasdaq and ICE had tried to assuage regulators’ concerns, in part by offering to sell off certain businesses, but it was not enough.  Christine Varney, antitrust chief of the Justice Department, had this to say:

“The acquisition would have removed incentives for competitive pricing, high quality of service, and innovation in the listing, trading and data services these exchange operators provide to the investing public and to new and established companies that need access to U.S. stock markets."   - - .

Robert Griefeld responded with this statement:  "We have said from the beginning that NYSE Euronext shareholders should not be forced to vote on their combination with Deutsche Börse while antitrust concerns continued to exist in both the U.S. and the E.U.  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.”    [NYT DealBook, 5/16/11]