Pfizer / Credit: pio3/Shutterstock.com

The European Commission has cleared the way for the U.K.-based pharmaceutical giant GlaxoSmithKline to acquire the consumer health business of U.S.-based Pfizer, as long as it sells Pfizer's pain management business.

The EU's antitrust authority reached its decision after the U.K. and U.S. companies agreed in June to divest Pfizer's ThermaCare pain therapy brand.

This commitment removes "almost entirely the overlaps between GSK and Pfizer's consumer health business", the Commission said in a statement.

Both GlaxoSmithKline and Pfizer make over-the-counter drugs and consumer products, and because both manufacture and distribute pain management products, the commission focused in on that market as it examined the impact of the proposed merger. It found there was overlap in the pain management sector and said the merger could, therefore, lead to lower competition and price increases in Austria, Germany, Ireland, Italy and the Netherlands.

To address these concerns, the companies offered to divest Pfizer's topical pain management business, which is globally branded ThermaCare.

The Commission said the assets will have to be sold as a package to a single purchaser and will need Commission approval. The sale will include a Pfizer factory in the U.S., all intellectual property rights relating to the ThermaCare products and brand, as well as products under development.

But EU approval means the proposed deal has overcome a major hurdle in the merger of the companies' over-the-counter brands, with combined sales worth £9.8 billion ($12 billion).

GSK will now split into two entities, one specialised in the development of drugs and the other in consumer healthcare.