NEW YORK (AFP) - US toymaker Hasbro has ended talks to buy DreamWorks Animation, the film studio which produced the blockbuster series Shrek, the New York Times reported Saturday.

The newspaper said the talks ended after Hasbro shares nose-dived this week amid rumors of the potential merger.

The daily also cited negative reaction from the Walt Disney Company, which makes up about 30 per cent of Hasbro's business through product tie-ins for Star Wars, Marvel superheroes and other toy lines.

Hasbro, known for such toys as Transformers and My Little Pony as well as board games like Monopoly, had planned to pay a mix of cash and stock, according to news reports earlier this week.

DreamWorks Animation is the largest independent animation studio in Hollywood.

The company was spun off in 2004 from DreamWorks Studios, founded by David Geffen, Steven Spielberg and Jeffrey Katzenberg.

It posts yearly revenue of about US$700 million (S$900 million) and makes just a few films a year.

But some of them, such as the Shrek series, Kung Fu Panda and Dragon, have been huge box office hits.

In September, the studio held talks with another prospective buyer, Japanese telecoms company SoftBank, but they did not result in an agreement.