In a statement, the Justice Department said that it had told the companies that it would file an antitrust lawsuit to block a deal.
The Antitrust Division of the US Department of Justice said combining the country’s two main stock markets would create an unacceptable monopoly.
Nasdaq OMX CEO Bob Greifeld said they took the decision to withdraw their offer when it became clear that they would not be successful in securing regulatory approval for their proposal despite offering a variety of substantial remedies, including the sale of the NYSE SRO and related businesses.
"We saw a unique opportunity to create more value for stockholders and strengthen the US as a center for capital formation amid an ongoing shift of these vital activities and jobs outside of our country," Greifeld added.
Nasdaq was bidding jointly with IntercontinentalExchange, a derivatives trader which would have taken over the derivatives side of NYSE Euronext, including London-based Liffe.
NYSE Euronext’s plan to sell itself to Deutsche Boerse for $9.9bn can now continue relatively unimpeded, though it still needs to win approval from regulatory figures and shareholders in Europe and the US.
Nasdaq could look at deals with other stock exchanges, like the Singapore Exchange or London Stock Exchange Group.
