WASHINGTON (Bloomberg) -- ZF Friedrichshafen won approval from the U.S. Federal Trade Commission (FTC) to buy TRW Automotive Holdings on the condition it sells TRW's linkage and suspension business in North America and Europe.
The FTC said without the asset sales the $12.4 billion merger would harm competition in the market for heavy vehicle tie rods.
The merger of ZF and TRW will create the world's second-largest auto parts supplier after Robert Bosch. The companies won approval from Europe for their deal in March.
ZF and TRW are two of the three companies in North America that make tie rods, which connect a car's wheels with the steering mechanism, the FTC said in a statement on Tuesday.
TRW's linkage and suspension business includes five manufacturing plants in the U.S., Canada, the Czech Republic and Germany, and leased space in a lab in Germany.
The deal, which was announced in September, has been viewed as a way for ZF to bulk up and expand into the potentially lucrative self-driving car market.
Self-driving cars and the technology to develop them have also attracted interest from Silicon Valley companies such as Google and Apple, pitting them against traditional carmakers.
With FTC clearance, the acquisition is now subject to antitrust approval in Mexico and customary closing conditions. The deal is expected to close by the end of the month, TRW said in a statement.
Nora Naughton and Reuters contributed to this report