Rewe, the German retailer, has agreed to sell off a number of Adeg stores in Austria in order to get EU approval for its proposed acquisition of the company.

The European Commission said it had agreed to give the green light to the deal after Rewe said it would offload Adeg stores in parts of Austria where the EU had concerns over competition.

Rewe has also agreed to encourage Adeg merchants to leave the Adeg network to meet EU concerns over the deal.

Rewe struck a deal to take control of Adeg, a co-operative retailer, in December, through the acquisition of a 75% stake in the business.

However, the EU delayed the completion of the deal due to concerns that the move would lead to possible increased grocery prices in parts of Austria.

Competition Commissioner Neelie Kroes said: "Rising food prices are a serious global problem. This case shows that competition policy can contribute by ensuring that retail markets remain as competitive as possible."

Rewe is market leader in Austria through its network of Billa, Penny and Merkur stores. Spar is Austria's number two retailer.