Antitrust regulators on Wednesday approved Whirlpool Corp.'s (WHR) proposed $1.79 billion purchase of Maytag Corp., saying the merger would not reduce competition substantially.

The existence of strong rivals and the cost savings the new company would generate indicate "this transaction is not likely to harm consumer welfare," the Justice Department said.

An investigation by the department's Antitrust Division found that an effort by the new company to raise prices on its washers and dryers "likely would be unsuccessful" because at least five other companies are well-established in U.S. markets.

Those competitors include the Sears brand Kenmore, General Electric and Frigidaire. The Justice Department also concluded that LG and Samsung and other foreign manufacturers have quickly established themselves in recent years.

"LG, Samsung and other foreign manufacturers could increase their imports to the U.S.," the department said in a statement. "Existing U.S. manufacturers have excess capacity and could increase their production."

The government also concluded that large retailers including Sears, Lowe's, The Home Depot and Best Buy have alternatives available to help them resist any attempt by the combined company to raise prices.

The cost savings and other efficiencies gained by the merger should also benefit consumers, the department said.

The companies had agreed not to close the transaction before Thursday.

Some analysts and antitrust lawyers had expected the Justice Department to object to the deal. The merger would create a company producing half of the dishwashers in the United States and more than 70 percent of the clothes washers and dryers.

Such a rise in market concentration has typically drawn a challenge from the government.

Whirlpool, based in Benton Harbor, Mich., is the largest appliance manufacturer in the United States.

Maytag, based in Newton, Iowa, is number three, behind GE Consumer products.

The antitrust division has been reviewing the proposed merger since September. The companies announced that they had signed a definitive merger agreement in August.

The government asked for more time to review the merger last month, prompting wide speculation that it was preparing to challenge the deal.

Whirlpool offered to pay $21 a share for Maytag. Including the assumption of $977 million of Maytag debt, the entire deal is valued at about $2.7 billion.

Whirlpool won a bidding match last summer that included a $14 per share bid by New York investment firm Ripplewood Holdings and investment partners. China's Haier America, backed by Bain Capital and Blackstone Group had bid $16 per share to acquire Newton, Iowa-based Maytag, whose brands include Maytag, Amana, Hoover, Jenn-Air and Magic Chef.

Whirlpool racheted up the bidding from its initial $17 offer to $21 to entice Maytag away from the Ripplewood group. Maytag initially expressed concerns about whether a merger with Whirlpool would get federal approval, but signed an agreement after Whirlpool offered to pay a $40 million termination fee to get Maytag out of its agreement with Ripplewood.

Maytag shares rose $4.73, or 27.7 percent, to close at $21.81 on the New York Stock Exchange. They have traded in a 52-week range of $9.21 to $19.97.

Whirlpool shares gained $6.38, or 7.1 percent, to close at $95.95. They've traded between $60.78 and $91.92 in the past year.