Brussels, Nov 9 - Kraft Food Inc, the world's biggest cookie maker, won conditional permission from EU regulators on Friday to buy the biscuits and cereal snack unit of France's Danone for 5.3 billion euros ($7.8 billion).
"The (European) Commission's decision is conditional upon the divestiture of a range of Spanish biscuit brands, a plant in Spain and a Hungarian chocolate bar brand," the European Union executive body said in a statement.
The transaction involving Danone's biscuit division, which includes the LU, Prince and Tuc brands, will give U.S. food giant Kraft a stronger foothold in Europe and in emerging markets.
It will allow Danone to focus on the health range in its fast-growing dairy and drinks business, pay off some 2.9 billion euros of debt and raise cash for possible acquisitions.
Danone and Kraft, maker of Oreo and Chips Ahoy! cookies, Philadelphia cheese and Milka and Cote d'Or chocolate, had expected the deal could be finalised in the last quarter of 2007.
To address the Commission's doubts as to the compatibility of the proposed transaction with the EU single market, Kraft made the commitment to divest a range of Spanish biscuit brands, such as Artiach, Chiquilin, Filipinos and Marba Dorada and one of its production plants in Spain, the Commission said.
With regards to Hungary, Kraft undertook to divest the Balaton brand. After market testing these commitments, the Commission concluded that they would be suitable to remedy the doubts.