U.S. fund manager BlackRock gained European Union regulatory approval on Wednesday for its acquisition of a Barclays investment unit for $13.5 billion in cash and shares.

The planned buy of Barclays Global Investors will elevate BlackRock to the world's largest money manager with $2.8 trillion of client funds. The new combined company will be called BlackRock Global Investors.

The European Commission, competition watchdog of the 27-country European Union, said in a statement that the deal raised no competition concerns even though there were overlaps in several services including retail asset management.

The Commission's market investigation confirmed that although the combined firm would be a significant player in a number of the sectors, its market shares would remain relatively limited, the EU executive said in a statement.

The deal will give BlackRock exposure to exchange-traded funds, which allow investors to buy assets such as precious metals or foreign stocks easily.

Barclays will gain much-needed capital from the sale to bolster its balance sheet, having relied on support from Middle Eastern governments rather than Britain's to help it through the credit crunch.

BlackRock, founded 20 years ago as a bond investment firm, has managed to sidestep the toxic assets and vehicles that have laid low many competitors. The U.S. government selected BlackRock to manage troubled assets from Bear Stearns and American International Group Inc.

(Reporting by Bate Felix; Editing by Dale Hudson)