NEW YORK -- Barnes & Noble Inc. called off its planned acquisition of Ingram Book Group Wednesday, amid growing speculation that antitrust regulators would challenge the $600 million deal to unite the world's largest bookstore chain and the No. 1 book distributor.
The announcement follows published reports in recent days that the Federal Trade Commission staff had concluded that such a combination would give Barnes & Noble an unfair competitive position.Both companies, in separate statements Wednesday morning, said that they worried that a prolonged review by the FTC would hurt their businesses.
"The review process has been disappointing to us," Ingram Book Group chairman John R. Ingram said in a statement announcing the deal has been terminated. "For six months, we've responded to every question.
"The events of the last several days have made it clear that some (FTC) staff hold an outdated view of the marketplace, making an objective analysis of the transaction impossible," he said.
Since the companies announced their merger plans in November, the deal has come under fire. Critics said that such a union would give Barnes & Noble an unfair advantage over independent bookstores and discourage Ingram from distributing books that don't have mass appeal.
The American Booksellers Association, which represents 3,400 independent bookstore companies across the nation, had been the most vocal opponent of the proposed merger.
Commenting on the news of the breakup, Oren Teicher, chief operating officer of the booksellers' group, said: "This shows that David can beat Goliath sometimes.
"When this proposed deal was first announced, virtually nobody predicted that this deal could be stopped. Small booksellers wrote letters, made phone calls, did everything to raise awareness of this issue, and against extraordinary odds, they have succeeded," Teicher said.
Barnes & Noble officials, however, have said the acquisition would have allowed Ingram to distribute a wider selection of titles and allow Barnes & Noble to deliver books faster and at less cost.
Ingram, a subsidiary of privately held Ingram Industries Inc. of Nashville, Tenn., distributes trade books, audio tapes, textbooks and specialty magazines through 11 distribution centers around the nation. It ships some 115 million titles every year.
With the deal terminated, Barnes & Noble said that it plans to use the $600 million it had previously earmarked for the merger "for other strategic investments and acquisitions." It also will go forward with plans to build two new distribution centers of its own, one in Reno, Nev., and the other in Memphis, Tenn.