(Adds no breakup fee, stock prices)
WASHINGTON, March 6 (Reuters) - J.M. Smucker Co said on Tuesday it will abandon its plan to acquire Conagra Brand Inc's Wesson oil brand after the U.S. Federal Trade Commission moved to block the deal, arguing it would likely lessen competition and violate anti-trust law.
Mark Smucker, chief executive of J.M. Smucker, said "it is not in the best interest of either party to expend the anticipated significant additional time and resources to challenge the FTC's administrative complaint."
He said the FTC "underestimated the significant role that private label brands play in the oils category, which account for approximately 50 percent of all cooking oil sales and hold significantly higher market share at some retailers."
Conagra said in a statement that it was disappointed by the FTC's decision and would continue "its evaluation of the role of the Wesson oil business within its portfolio."
"We have determined that it is in the best interest of our shareholders, customers and employees to terminate the agreement to sell the Wesson oil business to the J.M. Smucker Company rather than pursue litigation," Conagra said.
There is no break-up fee.
Smucker owns the Crisco brand. If it acquired the Wesson brand, it would have controlled at least 70 percent of the market for branded canola and vegetable oils sold to grocery stores and other retailers, the FTC said in a statement.
Ian Conner, deputy director of the FTC's bureau of competition, said on Tuesday the announcement "is good news for consumers across the United States because they will continue to reap the benefits of vigorous competition in the market for branded canola and vegetable oils."
Conagra announced plans to sell the Wesson brand for about $285 million in May 2017.
Conagra, the maker of Chef Boyardee pasta and Orville Redenbachers popcorn, sold its loss-making private-label business in 2016 to TreeHouse Foods Inc and spun off its Lamb Weston frozen potato business.
J.M. Smucker had said it expected the deal to add about $230 million to its annual net sales.
The FTC said retailers and ultimately consumers "would likely face higher prices for branded canola and vegetable cooking oil" if the deal was approved.
The FTC said the deal was struck after attempted price increases by each brand over the past two years that were limited by intense competition from the two rivals.
The FTC said Smuckers internal documents acknowledged that eliminating price competition between Crisco and Wesson was a central part of its rationale for the acquisition.
(Reporting by David Shepardson Editing by Tom Brown)