American package delivery company UPS has called off its plans to merge with Dutch peer TNT Express after the European Commission indicated it would block the deal, local media reported on Monday.

The news sent TNT's shares down 49 percent in the Amsterdam trading during early morning trading on Monday, marking one of the biggest transactions that the commission has ruled against. Post NL, which owns nearly 30 percent of TNT's shares, was down 34 percent.

The collapse of the deal is particularly damaging for TNT Express, which has struggled to turn around in a weak European market.

"TNT Express regrets this situation, having believed the merger was feasible and beneficial for all stakeholders," the Dutch firm told local media.

UPS agreed to pay 5.16 billion euros (6.9 billion U.S. dollars) or 9.50 euros (12.7 U.S. dollars) a share for Dutch group TNT Express in March 2012. TNT Express was spun off when TNT Post split into its express arm and PostNL in 2011.

However, objections from Brussels, which fears the new group would have a dominant position in several European countries leaving customers with little choice.

Brussels has only blocked 22 mergers and acquisitions deals since the introduction of merger control rules in 1989.