The U.S. Federal Trade Commission on Thursday cleared Merck & Co.'s (MRK) $41 billion acquisition of Schering-Plough Corp. (SGP), but required the companies to divest assets as a condition of government approval.

Under the terms of an agreement with the FTC, Merck must sell its interest in Merial Ltd., an animal health joint venture with Sanofi-Aventis SA (SNY, SAN.FR), while Schering-Plough must sell assets in nausea drugs for humans.

The asset sales for nausea drugs were necessary to alleviate competitive concerns regarding human drugs known as NK 1 receptor antagonists, the FTC said.

The drug makers reached their deal in March.

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; brent.kendall@dowjones.com