French dairy giant Lactalis has won approval from European Union (EU) antitrust regulator to buy Italian rival Parmalat, a deal which would create the world's largest dairy producer.

The European Commission said in a statement on Tuesday that the takeover would not significantly impede effective competition in Italy or any other European countries.

Lactalis acquired a 28.97 percent stake in Parmalat in March. Then it launched a public bid, worth 3.4 billion euros (4.9 billion U.S. dollars) to purchase all the shares in Parmalat in May.

The bid, which would create the world's biggest dairy group with estimated combined annual revenues of 14 billion euros (20 billion U.S. dollars), had been opposed by the Italian government for fear that one of the country's best-known companies would fall into foreign hands.

Parmalat is active in the production and distribution of milk, dairy products and fruit beverages. It had become the leading global company in the production of ultra high temperature milk, but it collapsed in 2003 due to a major financial fraud.

Today, Parmalat is a company with a global presence, having major operations in Europe, Latin America, North America, Australia, China and South Africa.

Lactalis is Europe's largest dairy company based in France and its range of products includes, among others, cheeses, milk, cream and butter.