Volvo chief executive Leif Johansson said he regretted the decision which seemed "to go against the basic concept of the common market."
The company reportedly said it won't sell its 45.5% stake in Scania, which is not affected by the EC decision. Shares purchased from stockholders that accepted Volvo's takeover bid will be returned.
Scania said the uncertainty of the past year has been a burden on the company and its sales organization, but had done no short term damage to the company.
The commission said Volvo's last minute efforts to solve competition concerns were insufficient. The company announced last week that it would make no further concessions and accused the commission of favoring companies from larger decisions in pervious merger decisions.
Announcement of the decision sparked new rumors that Volkswagen or MAN may try to join forces with Scania.
"We certainly feel that we have the opportunity as a company to be in the driving seat to make acquisitions but we have also said that if good proposals come from outside, whatever the structure, we will look at them," Johansson said in a teleconference.
Johansson said the board would look at any bid from outside and try to weigh it against the group's own plans and to come up with sound recommendations to its shareholders.
"We will evaluate the alternatives both in Europe, North America and Asia. We have as an overall strategy to make sure that we are among the world's biggest in all our business areas but we see this market, especially the European market, will consolidate so we want to continue to be active."
Volvo and Mitsubishi Motors Corp (MMC) already cooperate. Volvo plans to eventually take a 19.9 percent of a new Mitsubishi subdisidary including all the Japanese group's truck and bus operations. Volvo has already purchased a five percent stake of MMC.
"We already have good cooperation with Mitsubishi," Johansson said. "In that cooperation there is also opportunities to look at cooperation like buses and we're doing this, we see cooperation with Mitsubishi as an Asian strategy and as a product strategy."