European Union competition regulators approved on Tuesday the acquisition of Ford Motor's Volvo car unit by Chinese carmaker Geely Automobile Holdings and state-owned investment group Daqing.

Following an investigation, the European Commission concluded that the proposed deal would not significantly impede competition in Europe, the EU executive said in a statement.

Geely's $1.8 billion takeover of Sweden-based Volvo was agreed in March and represents China's biggest overseas auto purchase to date.

The deal is seen as a further milestone in China's emergence as an auto sector powerhouse, after the country overtook the United States as the world's biggest car market last year.

(Reporting by Charlie Dunmore)