NEW YORK (The Deal) -- After delaying the deal, China's Ministry of Commerce on Wednesday, April 30, approved Merck KGaA's (MKGAY) £1.81 billion ($3.1 billion) acquisition of London-listed AZ Electronics Materials, a chemicals supplier to the electronics industry.
The regulator, known as Mofcom, said Merck would have to continue offering customers both it and AZ's products separately and would also have to report any licensing deals the combined company enters.
Permission from Mofcom was the final sticking block in the December deal, which will expand Merck's position as the world's biggest maker of liquid display crystals for monitors and televisions. The deal will create 25 million ($34.7 million) in annual savings by 2016, Merck has said.
On April 18, the company said its public offer had reeled in 67.5% of AZ.
At the time, the company said it was extending the bid through May 2 because it had not yet received Mofcom approval - it made a similar move in February.
"We are very pleased that our constructive negotiations with Mofcom have led to a clearance of our planned acquisition of AZ Electronic Materials. We will thoroughly review the decision and update the market as planned on May 2," the company said.
Merck said its offer must lure at least 75% of the target's shares for it to proceed.
Merck is offering 403.5 pence a share, a premium of 53% to AZ's closing price just before the approach was unveiled in early December. The offer includes £1.57 billion for AZ's stock and £240 million in AZ debt.
Mofcom is notorious for delaying deals and Shang Ming, the director general of the Anti-Monopoly Bureau within Mofcom, last month said new rules instituted in February would speed approvals.
AZ was floated at 240 pence a share in October 2010 by its former private equity owners Carlyle Group (CG - Get Report) and Vestar Capital Partners. The company generated Ebitda of $262 million and profit before tax of $129.1 million on revenue of $793.9 million in 2012.
AZ is registered in Luxembourg, despite its London listing and additional corporate support offices in Uxbridge, England, and Hong Kong.