TOKYO - Nippon Steel Corp, Japan's largest steelmaker, received clearance for its 685 billion yen ($8.8 billion) all-share purchase of Sumitomo Metal Industries Ltd to create the world's second-biggest steelmaker.

The Japan Fair Trade Commission (FTC) announced its approval of the deal at a news conference in Tokyo on Wednesday. The merger will be completed by October next year, the companies said.

Nippon Steel is offering 0.735 of its shares for each Sumitomo Metal share, they said in September. Including assumed debt, the transaction is worth about 1.7 trillion yen.