Europcar, Europe's largest car rental company, is allowed to take over German rival Buchbinder, the German Federal Cartel Office (Bundeskartellamt) declared on Thursday.
The acquisition enables the French firm to narrow the market share gap with its main local competitor Sixt.
Bavaria-based Buchbinder is the fifth largest rental car company in Germany by revenue.
The firm, which has about 20,000 vehicles in operation, will continue to exist as a distinct brand. Details about the cost of the takeover were not revealed.
Federal Cartel Office president Andreas Mundt expressed confidence that the German car rentals market was highly diversified with several large and small providers.
Europcar would not achieve a "market-dominating position" as a consequence of the purchase, Mundt said. Market leader Sixt reported revenue of 823 million euros (960 million U.S. dollars) in Germany last year, compared to Europcar's 500 million euros.
Europcar director Caroline Parot said the acquisition would allow her company to grow its business in the affordable car rental and truck rental markets. (1 euro = 1.17 dollars)
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