United Parcel Service said Monday that it will withdraw its $6.9 billion offer to buy Dutch shipping company TNT Express after being told by European regulators they intended to block the deal over competition concerns.

In its own statement on Monday, TNT said it had also been informed by European Commission officials that the deal would not gain the body’s approval. The two companies said the deal will be officially terminated once the EC issues its formal decision—an event that is expected to occur in the next couple of weeks. Per the terms of their agreement, which was announced last March, UPS will pay TNT a termination fee of $267.4 million. 

The EC had been investigating the agreement between UPS and TNT since July due to concerns over the proposed deal’s effect on competition in Europe’s parcel delivery market. The Am Law Daily reported in March that Freshfields Bruckhaus Deringer and Allen & Overy were advising UPS and TNT, respectively, in connection with a transaction that would have qualified as the biggest acquisition in UPS’s 106-year history and given the Atlanta-based company an important foothold overseas.

The two companies have insisted that the proposed deal would improve competition in Europe and benefit consumers. The Wall Street Journal also notes that UPS revised the deal agreement three different times in an effort to appease regulators, and the companies announced in November that they were planning various asset sales in order to win antitrust approval. Those moves, however, did not ease EC concerns about the deal’s potential to give UPS too strong a presence in Europe, as well as certain emerging markets, where its only major competition would have come from U.S. rival FedEx and Deutsche-Post’s DHL.

UPS CEO Scott Davis said in a statement that his company is “extremely disappointed with the EC’s position.”

Not surprisingly, FedEx and DHL actively opposed the deal and lobbied against it. After UPS and TNT announced their agreement, the Journal noted that FedEx—which was itself viewed at one point as a possible TNT suitor—would face an uphill climb competing in the European market if the deal went through. U.K. publication Legal Week reports that FedEx “is understood to have made around 40 to 50 written submissions questioning the transaction.”

Baker & McKenzie has been representing FedEx in connection with its opposition to the transaction with a team led by European and competition law partners Fiona Carlin and Gavin Bushell in Brussels, Legal Week reports. When contacted by The Am Law Daily, Carlin confirmed her role in the matter but declined to comment further. Baker advised FedEx in 2010 in connection with a Japanese government probe into the fatal crash of a FedEx airplane at Narita International Airport caused by windy conditions.

For its own opposition to the UPS–TNT tie-up, DHL turned to a Cadwalader, Wickersham & Taft team led by Brussels-based competition partner Alec Burnside. Competition special counsel Anne MacGregor also advised.

As The Am Law Daily has previously reported, UPS was advised on the deal by a Freshfields team that included corporate partners Jan Willem van der Staay and Alexander Doorman, as well as antitrust partners Winfred Knibbeler and Alan Ryan. Allen & Overy corporate partners Jan Louis Burggraaf and Tim Stevens led a team from that firm advising TNT, with partner Paul Glazener advising on antitrust aspects.

The New York Times‘s Michael De La Merced noted Monday that the EC’s decision to oppose the UPS–TNT deal is just the latest example of European regulators showing they are “more than willing to flex their considerable muscle.” Last year, the EC scuttled a proposed merger of leading stock exchanges NYSE Euronext and Deutsche Börse. European regulators are not alone in adopting an aggressive stance in recent years, as their counterparts at the U.S. Department of Justice thwarted AT&T’s proposed $39 billion takeover of T-Mobile USA in 2011.