European Union regulators are recommending rejection of a proposed $17 billion tie-up of NYSE Euronext (NYX) and Deutsche Boerse (DBOEF) stock and derivative exchanges.

Regulators fear that the deal, which would create the largest operator of stock exchanges in the world, would unfairly give control to the group of more than 90 percent of EU's listed derivatives market, despite several concessions proposed by the firms, including the spinoff of some overlapping contracts, the Wall Street Journal said Wednesday.

Deutsche Boerse and NYSE Euronext said in separate statements Tuesday that they have not yet received any final decision by the European Commission, the administrative arm of the EU, on the proposed merger. The tentative rejection of the proposal stemmed from concerns that such a deal would result in too much control of the EU's derivatives market.

Chief executives of the two firms were to meet Wednesday in New York to discuss the next steps of the year-long plan to merge their stock exchanges. 

EU commissioners are to discuss the deal on Feb. 1 and make the final ruling by Feb. 9. The deal could still happen, if the majority of the 27 EU commissioners vote to clear the deal, but it is not likely. 

"The commissioners have rarely voted against the case team's recommendation, so the probability of the deal going through now drops to 20 percent," UBS analyst Arnaud Gilbat told Reuters.

In the meantime, both exchanges have stepped up their lobbying efforts.

"We have clearly demonstrated to the European Commission the strong benefits that our combination will bring to a broad set of stakeholders in Europe," the spokesman for Deutsche Boerse said in the statement.

U.S. regulators approved the NYSE-Deutsche deal on Dec. 22, under the condition that the German conglomerate sell its 31.54 percent stake in Direct Edge Holdings LLC, the fourth-largest U.S. exchange operator.

NYSE Euronext declined 1.04 percent to $27.5. Deutsche Boerse shares are up 1.42 percent at EUR42.6 in Wednesday morning trading.