China's antitrust regulator said on Sunday it has approved Keysight Technologies' proposed acquisition of Spirent Communications, but with restrictive conditions aimed at preserving competition in global and domestic telecoms testing markets.

The State Administration for Market Regulation said the deal, which involves two leading suppliers of communication testing products, would significantly strengthen Keysight's control in markets for high-speed Ethernet testing and cybersecurity testing products in the Chinese market.

To address competition concerns, the watchdog required the divestiture of businesses that pose serious competitive problems and imposed other conditions to maintain market structure. "The conditional approval ensures fair participation of other suppliers globally and protects the choice of downstream clients, including telecom operators," the regulator said in a statement.

Communication testing products are regarded as the backbone of the telecommunications sector. The regulator said its decision balances industrial development with safeguarding competition, creating "a fair and orderly environment" for the industry's growth globally.

The regulator added it will continue to supervise and guide Keysight and Spirent in implementing the remedies attached to the approval, ensuring that competition in the relevant markets effectively maintained.