UPDATE 1-Lawson drops am/pm bid on store name dispute: Nikkei

May 19 (Reuters) - Lawson Inc (2651.T: Quote, Profile, Research), Japan's second-largest convenience store chain, has scrapped its plan to buy am/pm Japan Co, saying it could not accept a demand of retaining the smaller rival's name on some stores, the Nikkei business daily reported.

In February, Lawson agreed to buy am/pm Japan Co, owned by retailing group Rex Holdings Co, for $149 million, a deal that would increase Lawson's stores by about 1,100 stores, boosting its presence in Tokyo. [ID:nT44779]

But the acquisition was subject to the approval of U.S. firm am/pm International Inc, which owns the am/pm trademark and asked that 700 of the am/pm stores retain the name, the paper said, without citing sources.

Lawson and Rex will officially announce Tuesday that talks have broken down, Nikkei said. (Reporting by Amitha Rajan in Bangalore; Editing by Deepak Kannan)