EU regulators cleared Thursday German chemicals giant BASF's 4.9-billion-dollar planned takeover of US chemicals firm Engelhard.

"The (European) Commission concluded that the transaction would not significantly impede effective competition," it concluded after reviewing the deal for antitrust problems.

In January, BASF, the world's biggest chemicals company, bid 4.9 billion dollars (4.1 billion euros) for Engelhard. The US company has dismissed this as too low.

The all-cash offer is considered the biggest hostile takeover bid ever by a European group for one in the United States.

The EU competition watchdog said that although the operations of the two companies overlapped on the markets for catalysts and pigments, there were enough rivals to ensure competition.