After examining the deal the Commission concluded that that the takeover would not result in higher prices for cosmetics for European customers, nor would it impede effective competition in the European Economic Area.
"The Commission's examination showed that the horizontal overlaps between the activities of The Body Shop and L'Oreal were limited and that the combined entity would continue to face several strong competitors with significant market share," the Commission said in a statement.
News of the approval boosted the share price of The Body Shop, up 3-1/4 pence, to almost 300 pence per share. The original deal saw L'Oreal pay a total of £652m ($1.145bn) for a deal that secured a majority stake. The offer meant that shares, valued at 250 pence on the London Stock Exchange on the day of the initial announcement, were bought from shareholders for 300 pence.
Share prices have hovered around the 298 pence mark ever since.
In a separate statement, L'Oreal announced that it had "acquired, or received valid acceptances of the Offer in respect of 207,005,367 The Body Shop Shares in aggregate representing approximately 95 per cent of the existing issued ordinary share capital of The Body Shop."
"The Offer is declared unconditional as to acceptances," said the statement.
L'Oreal says that its primary objective will be to increase The Body Shop's growth, while adding a complementary brand with a strong identity and values to its portfolio. In turn it says that The Body Shop will benefit from access to L'Oreal research and development facilities, as well as its marketing resources.
The intention is to develop The Body Shop as a standalone unit within the L'Oreal business portfolio, which means that The Body Shop retail units would continue to sell only its own-brand products.
Although The Body Shop's £700m yearly turnover pales when compared to L'Oreal's £10bn turnover, the acquisition certainly appears to make good business sense.
After announcing L'Oreal's yearly results in February, Sir Lindsay Owen-Jones, L'Oreal CEO said that the company was on the acquisition trail and that it would be actively looking for opportunities in new areas of the personal care business in order to maintain the consistent sales growth of the last ten years.