The Dutch brewer Heineken is to join forces with Bayerische BrauHolding of Germany under a deal approved on Friday by the European Commission.

Heineken is active throughout the 15 EU countries in the brewing and
distribution of beer and other beverages. The main brands of Bayerische
BrauHolding are Paulaner and Kulmbacher, which are not widely sold outside Germany.

Heineken is taking a financial participation in a new joint company Brau Holding International but will not contribute any business assets.

The Commission said there was some limited overlap of activities in Italy, in the hotel, restaurants and café sector, but in view of competition in that market, "the combined position does not pose concerns."