The European Commission has given the green light to a joint venture signed between China's Hubei Aviation Precision Machinery Technology (HAPM) and Magna International.
The venture will not be active in the European Economic Area, the Commission said in a statement.
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The case was under review after the Commission, which oversees the bloc's competition policy, received notification a month ago, according to a statement.
HAPM is a supplier of automotive seat mechanism and structure components.
In May, the two sides agreed to establish a green-field joint venture company, located in China and worth up to 1.49 billion yuan (US$221.8m), for the manufacture and sale of components for automotive seats for the Chinese market.
The joint venture deal is expected to be concluded between September and December, HAPM says.
HAPM is a major Chinese automotive seat mechanism and structure component supplier and a subsidiary company of AVIC Electromechanical Systems. Headquartered in Hubei Xiangyang, HAPM designs, develops and manufactures a wide range of automotive seating products from manual/power recliners, tracks, height adjusters and structures.
"The strategic cooperation brings together two innovative suppliers in the seating market to deliver a stronger product portfolio and advanced technology development to customers," the two companies said in a statement earlier this year.
"We are very pleased to establish such a cooperative relationship with Magna. As a world leading automotive supplier, Magna's global resources and expertise will be vital to the joint venture's success," said Wang Jian, chairman of AVIC.
"As the world's largest vehicle market, China is a region in which we want to expand our seating capabilities, and with HAPM's strong market position and seating mechanism know-how, we expect to grow our business even further in the region and throughout Asia," said Mike Bisson, president of Magna Seating.
