"After an investigation of all markets affected, the Commission concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it," the Commission said in a statement.
Competition Commissioner Neelie Kroes said she was satisfied "competition on price and technology will remain strong in the future on the bus and truck markets, in particular considering the increasing importance of environmentally-friendly technologies in this sector".
A merged MAN-Scania would become the European truck market leader, better able to compete with global giants such as DaimlerChrysler AG and Volvo AB due to scale advantages in purchasing, spare parts distribution, customer finance and service networks.
"This favorable decision on the part of the EU is a decisive signal and a clear endorsement of our project of forging a new European champion through the combination of MAN and Scania," said Hakan Samuelsson, chief executive of MAN, in a statement.
But Scania had a different view.
Scania spokeswoman Cecilia Edstrom said the EU ruling was as expected and did not change Scania's rejection of MAN's bid. "We are looking at this deal strictly from a business perspective, so this really does not mean anything," she said.
Scania rejected the 10.3 billion euro bid when it was first announced in October and again a month later after MAN released its formal offer document and prospectus.
Scania said a merger could yield possible long-term synergies but only if carefully executed and managed.
Ultimately the deal will come down to the support, or lack thereof, of Scania's two largest shareholders, Volkswagen AG and the Wallenberg family's Investor AB.
VW supports the tie-up in principle but has left all options open in case MAN and Scania cannot agree on terms.
MAN's takeover offer runs until Jan. 31 and depends on getting a 90 percent acceptance rate.