The State's monopolies watchdog has given Eircom the green light to buy mobile operator Meteor for €420 million.

The Competition Authority yesterday announced that it had approved the purchase, although it attached a number of minor conditions that will allow the communications regulator, ComReg, to scrutinise the enlarged company's accounts.

Eircom said last night that it will go ahead and close the Meteor deal on Wednesday. It is buying the company from Western Wireless, which put Ireland's third mobile group on the market earlier this year.

The authority has been investigating the proposed purchase since August 12th. It had to determine if the deal would "substantially lessen" competition in the markets in which both companies operate.

In a statement, the authority said yesterday it had determined that the transaction would not substantially lessen competition in those markets and said it could be "put into effect" subject to the conditions.

The conditions demand that Eircom will have to publish separate accounts for Meteor and any other mobile businesses that the company sets up.

It will also have to publish details of any transfer of costs and funds between Eircom's fixed-line business and Meteor, between the fixed-line business and any new mobile business that it sets up, and between Meteor and any new mobile business.

An authority spokesman explained last night that the conditions are designed to allow ComReg to scrutinise the allocation of funds and costs between any of the relevant Eircom business units in order to ensure that there are no abuses.

An Eircom spokesman said that the company was happy with the conditions and said that it would comply fully.

Along with Meteor, Eircom is likely to establish a specific set of mobile services for corporate customers, which is why the Competition Authority expressly mentioned any new ventures in this business.

Eircom chief executive Dr Philip Nolan said the company was happy that it could go ahead and complete the deal. "It completes the reconstruction of the company, which has taken four years of work by the company's management and employees," he said. Eircom beat off a number of rivals, including a partnership of Smart Telecom and Virgin Mobile, to buy Meteor, which has more than 400,000 subscribers.

It raised the cash it needs in a placement on October 7th.

Switzerland's state telecom, Swisscom, is looking at Eircom's books after making an initial takeover approach last month. It may be prepared to pay €2.5 billion for the company.

Eircom closed at €2.26 in Dublin last night.