08/22/2013 06:40 EDT | Updated 10/22/2013 05:12 EDT

LifeLabs takeover of CML HealthCare gets federal competition bureau's clearance

MISSISSAUGA, Ont. - The proposed takeover of CML HealthCare Inc. by another major lab services company has been cleared by the federal Competition Bureau.

LifeLabs Inc. is offering $10.75 per share cash for CML HealthCare and will assume $255 million of debt in the friendly deal.

The $1.22-billion proposal will combine two of Canada's largest providers of lab testing and medical imaging services.

CML HealthCare (TSX:CLC) says it has received a "no action" letter from the Competition Bureau, meaning the agency won't try to block or change the deal.

CML will hold a shareholders vote in Toronto on Sept. 3.