Abu Dhabi state owned International Petroleum Investment Company has won EU clearance to buy Germany's MAN Ferrostaal on condition that it divest MAN's stake in melamine producer Eurotecnica.

The European Commission said it had concerns that the deal as initially planned could have reduced competition on the melamine market because of the relationship between Eurotecnica and leading Austrian melamine producer AMI, controlled by IPIC.

Ms Neelie Kroes EU Competition commissioner in a statement said that “In view of the remedies offered, I am satisfied that after the proposed takeover, there would be no adverse effects on competition on high quality melamine markets.”

She said that customers in the paper, wood, car and other industries would not suffer from reduced choice or higher prices as a result of the deal.

IPIC said when the deal was announced that it would pay EUR 490 million for a 70% stake in the industrial services unit of the MAN group, with an option to buy the rest by 2010.

A joint venture company, IPIC MAN Ferrostaal will be set up in Abu Dhabi shortly with IPIC holding 60 per cent equity.

(Sourced from Reuters)