European regulators have approved Takeda’s proposed acquisition of its US rival Shire, clearing the way for the £46 billion deal to complete.

The clearance is conditional on both companies fulfilling commitments they made to the European Commission with regard to potential future overlap between Takeda’s Entyvio and Shire’s pipeline compound SHP647 in the area of inflammatory bowel disease (IBD).

Both treatments belong to a class of biologics called anti-integrins, which for some IBD patients are the only type of biologic that can be prescribed. The Commission was concerned that Takeda would be unlikely to continue developing Shire’s SHP647 compound, which it said would have meant a serious loss of innovation on the market as well as preventing competition with Entyvio. The companies have pledged to divest SHP647 and the rights to development, manufacturing and marketing, although the sale in itself is not a condition for the transaction to complete.

“We are very pleased to have secured clearance from the European Commission, the final regulatory approval required to proceed with our acquisition of Shire,” said Christophe Weber, Takeda’s president and CEO. “We are another step closer to creating a global, values-based, R&D-driven biopharmaceutical leader, and after several months of constructive dialogue, we are optimistic that our shareholders recognize the significant long-term value creation potential of this powerful combination.”

Shire finally agreed to Takeda’s takeover terms in May following several weeks of wrangling, during which it rebuffed four bids by the Japanese group. Along with Europe, the US, Japan, China and Brazil have approved the merger, among other regulatory authorities. The acquisition remains subject to approval from the shareholders of Takeda and Shire, as well as other closing conditions. A shareholder vote is due on Dec. 5 and Takeda has confirmed its previous expectation that the transaction will complete on Jan. 8, 2019.

The deal will be Takeda’s largest ever and the biggest foreign acquisition on record by a Japanese company. The combined entity will be one of the world’s top 10 pharmaceutical companies by revenue with a focus on oncology, gastroenterology, neurology, rare diseases and plasma-derived therapies, which together will generate 75% of global sales.