German competition regulators have approved defence contractor Hensoldt's bid to acquire the defence electronics firm ESG.
The deal poses no "competition concerns, as the two companies have so far offered predominantly different products and services in the field of security and defence electronics," said the leader of Germany's Cartel Office, Andreas Mundt, on Thursday.
Hensoldt, which is based outside of Munich, builds radar and detection systems for military clients. ESG, meanwhile, integrates various electronic components in defence systems such as fighter aircraft.
The two companies are already working together on networking drones and other land, air and naval forces to as part of the Future Combat Mission System (FCMS) consortium between several German armaments firms.
Hensoldt's major shareholders are the German government and the Italian defence contractor Leonardo. ESG is currently owned by Armira, a private equity investment group.
The deal puts ESG's enterprise value at €675 million ($725 million).