The European Commission on Friday revealed it had approved plans by three Japanese firms to set up a joint venture to make and market synthetic textile machinery.

The new company, called TMT Machinery, has been set up by Toray Industries Inc, Murata Manufacturing Co Ltd and Teijin Seiki Co Ltd.

Although it will be based in Japan, EU competition watchdogs were required to assess its impact on the European markets since it broke the turnover thresholds required for EU antitrust approval.

"The Commission examined the impact of the joint venture on the European markets for spinning machines and texturing machines for synthetic fibres, as well as their possible sub-segments," the Commission said in a news release.

""But it concluded absence of any competition problems irrespective of whether the geographical market was defined as European or worldwide."

The three firms agreed to combine their textile machinery units in a bid to see off growing competition from China.