Blockbuster Withdraws Circuit City Proposal

Blockbuster is withdrawing its $1 billion proposal to acquire big-box retailer Circuit City.

Blockbuster announced plans for the merger in April. There was all along, however, speculation the merger would never happen.

"Based on market conditions and the completion of our initial due diligence process, we have determined that it is not in the best interest of Blockbuster's shareholders to proceed with an acquisition of Circuit City," says Blockbuster chairman and CEO Jim Keyes in a statement.

"We continue to believe in the strategic merits of a consumer retail proposition that would bring media content and electronic devices together under one brand.

"We will pursue this strategy through our Blockbuster stores as a way to diversify the business and better serve the entertainment retail segment."

Blockbuster also recently announced it will implement kiosks to download movies and redesign the layout of its stores.

The combined companies would have been an $18 billion enterprise, according to Blockbuster’s estimations.