PARIS (Bloomberg) — PartnerRe Ltd. won European Union antitrust approval to buy Paris Re Holdings Ltd. in a deal that may improve PartnerRe's ability to compete against larger rivals Munich Re and Swiss Reinsurance Co.

The European Commission, the 27-nation EU's antitrust regulator in Brussels, announced the decision yesterday.

Bermuda-based PartnerRe said the acquisition of Zug, Switzerland-based Paris Re, which provides reinsurance mainly to insurers of property, casualty and health risks, will bolster its balance sheet.

Paris Re was formed in 2006 when a group of investors led by buyout firm Stone Point Capital LLC acquired most of the reinsurance operations of Axa SA, Europe's second-biggest insurer.