The European Commission (EC) has approved the merger of US company Wabtec and France-based rail products company Faiveley Transport Gennevilliers (FTG) in a €1.7bn deal.

FTG is the sintered brake material company of Faiveley Transport.

Following approval by the US Department of Justice, the latest consent by EC was the last regulatory clearance needed to complete the proposed combination.

The acquisition of the stake in Faiveley by Wabtec is expected to occur on 30 November.

"This transaction would enable us to pursue our ambition to become a global leader in railway equipment and services in passenger transit."

Following the acquisition, Wabtec will file the public tender offer with the French financial markets authority AMF in December.

On 27 July 2015, Faiveley entered into negotiations with Wabtec after receiving a binding offer to acquire all Faiveley shares.

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By GlobalData

The proposed combination is expected to create a new railway equipment company with combined revenues of around €4bn, and improve Faiveley’s operations in the long-term.

Faiveley Transport CEO had Stéphane Rambaud-Measson said: “The combination of our operations with Wabtec would be an excellent strategic move for Faiveley Transport.

“This transaction would enable us to pursue our ambition to become a global leader in railway equipment and services in passenger transit.”

The combined company is set to benefit from a solid capital structure and financial flexibility that would enable it to capture further growth opportunities.