(BRUSSELS) - The European Union's top competition regulator approved on Wednesday a move by French car-maker Renault to buy a stake in Avtovaz, Russia's biggest auto producer and manufacturer of the Lada.

The regulator, the European Commission, said in a statement that it had examined the move and "concluded that the transaction would not significantly impede effective cooperation in the (EU) or any substantial part of it."

Under a deal signed in February, ending a long race by foreign investors to take a stake in the Soviet-era auto icon, Renault would receive a 25 percent plus-one-share stake for an initial payment of one billion dollars (657 million euros).

An additional payment of 166 million dollars (109 million euros) by 2010 would be made depending on the success of the tie-up.

In buying into Avtovaz, Renault is taking a major step into a market it estimates will reach 2.5 million units in 2007, before growing to 3.5 to 4.0 million units per year by 2015.

However the commission noted that "the proposed transaction would bring about only a very minor increment in market share, which would hardly have any influence on Renault's market position" in Europe.

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