The European Commission has approved HP's proposed acquisition of Electronic Data Systems.

HP will still have to win the approval of shareholders in its attempt to buy the outsourcing specialist for upwards of $13.9bn. EDS shareholders will vote on the offer on 31 July.

HP announced its intention to buy EDS in May, following a flurry of speculation. The purchase is HP's largest since paying $20bn for Compaq in 2002.

The merger brings together two of the 'big six' names in the outsourcing industry, and could challenge current outsourcing king IBM.

The acquisition was approved in the US by the Federal Trade Commission on 30 June.

HP and EDS have also settled five lawsuits brought by EDS shareholders over the proposed acquisition.

Final closing of the deal will not take place until 18 August, and EDS will pay out a final $.05 per share dividend to stockholders in September.