The European Commission has given its blessing to a planned joint venture between Lactalis and Nestle.

The deal was approved under the EU Merger Regulation, after the commission concluded that the partnership would not stymie competition in the European Economic Area (EEA) or any substantial part of it.

Lactalis, of France, produces and markets dairy products; Swiss-based Nestle is the world’s largest food products company.

Under the proposed transaction, the two companies would transfer their chilled dairy desserts to the joint venture in a number of European countries. The operation would give rise to an overlap in France on the market for milk-based desserts.

The commission found that private labels—partly supplied by Lactalis—will still be able to compete with the new entity as retailers can easily source their private labels from other suppliers than the company.