South Korea's antitrust regulator on Thursday approved Jungheung Group's acquisition of its bigger rival Daewoo Engineering & Construction Co. in a deal worth more than 2.06 trillion won ($1.7 billion).

The Fair Trade Commission approved the takeover deal as it won't hamper competition in the construction market, the regulator said in a statement.

Jungheung is the 17th largest builder in terms of building capacity, while Daewoo E&C ranks third.

In December, Jungheung Civil Engineering & Construction and Jungheung Construction reported their plan to acquire a 40.6 percent stake and a 10.15 percent stake in Daewoo E&C, respectively, to the Fair Trade Commission.

With the acquisition, Jungheung is expected to focus on winning overseas orders, the statement said.

In 2018, Hoban Construction Co. was selected as a preferred bidder for a stake in Daewoo E&C, but it later dropped its bid to buy the bigger rival, citing hidden losses in Daewoo E&C's overseas businesses. (Yonhap)