The U.S. Federal Trade Commission (FTC) has granted conditional clearance for the acquisition of Ranbaxy Laboratories by Sun Pharmaceutical Industries.

In a statement on Monday, the two companies said that the FTC had completed its review of the proposed acquisition and had granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act).

Sun first announced its plan to take over Ranbaxy in April 2014, saying that it would create the fifth-largest specialty generics company in the world and the largest pharmaceutical company in India.

The combined group will have operations in 65 countries, including 47 manufacturing facilities located across five continents, and a significant platform of specialty and generic products marketed globally. The firms' combined revenues for 2013 amounted to $4.2 billion, with EBITDA of $1.2 billion.

Early termination of the waiting period under the HSR Act satisfies one of the conditions to the closing of the deal.

To address FTC concerns that the Ranbaxy acquisition would likely be anticompetitive, the two companies agreed to divest Ranbaxy's interests in generic minocycline tablets and capsules. This business will be purchased by Torrent Pharmaceuticals, a global drug company based in India that markets generic drugs in the United States.

The FTC had argued that the proposed merger would likely harm future competition by reducing the number of generic minocycline suppliers in U.S. markets.

As part of the consent agreement, Sun and Ranbaxy must supply generic minocycline tablets and capsules to Torrent until the company establishes its own manufacturing infrastructure.

Sun and Ranbaxy said that they are working towards completion of the transaction and will comply with the conditions laid down in the consent agreement within the specified time.