The EC gave the go-ahead for the deal concluding that it would not significantly impede effective competition within the European Economic Area.
The activities of the two companies overlap in luxury cosmetics where they have strong make-up and perfume brands including Yves Saint Laurent and Lancome.
Buy out is not monoploy threat However, the fusion of these businesses under the same umbrella was not considered to represent a monopoly threat.
The Commission said its market investigation showed that the company would still face strong competition from international cosmetics manufacturers such as Estee Lauder, LVMH and Chanel.
At the end of April, L'Oreal announced that it had finalized the sale of YSL Beauté with PPR under the terms agreed in January.
The transaction, to be signed in the coming weeks, represents the enterprise value of YSL Beauté and will also include the Roger and Gallet subsidiary which makes perfumed soaps.
In addition, L'Oreal will have licenses for the fragrances and cosmetics of the Stella McCartney, Oscar de la Renta and Ermenegildo Zegna brands, although the former will remain the property of the PPR Group.
Although the Yves Saint Laurent and Boucheron brands will remain the property of the PPR Group, exclusive global long term licenses will be granted for their cosmetics and fragrance divisions.
PPR Chairman and CEO Francois-Henri Pinault said that L'Oreal would be able to offer a unique development platform for the brands and the agreement would allow YSL Beauté to take advantage of its "upside potential".
PPR is expected to transfer control of the beauty business to L'Oreal in the coming weeks.