The European Commission has given the go-ahead to the takeover of Vauxhall and Opel brands by France’s PSA Group, maker of Peugeot and Citroen cars.
European Commission said it had “unconditionally approved” Peugeot’s move to buy the European division of General Motors (GM).
It said it had concluded that “the transaction would raise no competition concerns in the relevant markets”.
Vauxhall employs 4,500 people in the UK at plants in Ellesmere Port and Luton.
Elsewhere in Europe, Opel employs about 33,500 staff in Germany, Poland, Hungary, Austria, Spain and Italy.
GM agreed the sale of its European division, on which it has not made a profit since 1999, to Peugeot in March.
In 2016 it lost $257m (£206m), making it the 16th consecutive loss-making year for GM in Europe, bringing its cumulated losses on the continent since 2000 to more than $15bn.
The deal will mean that Peugeot becomes Europe’s second-biggest carmaker, after Volkswagen.
It will enable the firm to boost its presence in the UK and to re-enter the US market, which Citroen left in 1974 and Peugeot exited in 1991.
In its statement, the European Commission said that in terms of the manufacture and sale of motor vehicles, the two firms had a combined market share of more than 40% in only two national markets, Estonia and Portugal, for small commercial vehicles.
“In the other affected markets, the market shares remain small,” it added.
“The Commission investigation also showed that the merged entity will still face strong competition from manufacturers such as Renault, Volkswagen, Daimler, Ford, Fiat and various Asian competitors.”