Brussels  - The European Union on Friday cleared the purchase of German construction firm MAN Ferrostaal by Abu Dhabi-based investment fund IPIC as long as MAN sells its share in a key manufacturer, officials in Brussels announced.

The EU's executive, the European Commission, cleared the purchase as long as MAN sold its share in the company Eurotecnica, which makes machines which produce melamine, a chemical used in the production of paper, and in the wood and automotive industries.

Eurotecnica licenses its production techniques to Austrian melamine producer AMI, among others. AMI is owned by IPIC.

The commission, which oversees the EU's competition rules, had feared that IPIC would be able to manipulate the European market for melamine if MAN kept its stake in Eurotecnica, the statement said.

But given the agreement to sell MAN's shares in Eurotecnica, EU Competition Commissioner Neelie Kroes said that she was "satisfied that there would be no adverse effects on competition on high quality melamine markets and that customers in the paper, wood, car and other industries would not suffer from reduced choice or higher prices." (dpa)