Wealth manager AMP Ltd (ASX:AMP) has been given the green light from New Zealand’s competition watchdog to buy AXA Asia Pacific Holdings Ltd (ASX:AXA).

AMP attempted to buy AXA before National Australia Bank Ltd (ASX:NAB) stepped in with a better offer and has now been granted clearance from New Zealand’s Commerce Commission.

NAB is now negotiating with the Australian Competition & Consumer Commission to win approval for its attempt to buy AXA’s Australian and New Zealand assets.

Commerce Commission chair Mark Berry says the commission was satisfied that the proposed takeover would not lessen competition in the sector.

AMP has welcomed the decision, saying that a merger of AMP and AXA Asia Pacific would create a fifth pillar in the financial services sector.

The company says the merger would also offer both AMP and AXA shareholders the opportunity to benefit from the long term growth potential of the combined group.

AMP reported a profit of $739 million for calendar 2009.