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Aug 1 (Reuters) -

The Australian competition watchdog will not oppose Louis Dreyfus' proposal to take over Namoi Cotton (NAM) , the regulator said on Thursday, a month after it raised concerns over a similar buyout bid by a Singaporean entity.

An affiliate of Singapore's Olam Group OLAG.SI and Dutch commodity merchant Louis Dreyfus Company (LDC) have been

engaged

in an international bidding war to take control of Namoi, which would help them expand their footprint in Australia.

In June, the Australian Competition and Consumer Commission (ACCC) said the proposed acquisition of Namoi by Singapore's Olam Agri IPO-OLAA.SI

raised

competition concerns in the supply of cotton ginning services.

The regulator, however, laid down a couple of conditions on Thursday for LDC to fulfill in order to proceed with the deal.

LDC and its units need to divest their stake in Australian cotton lint classing services firm ProClass and terminate its joint venture with sector peer WANT Cotton.

"ACCC has concluded that the LDC Group would not have sufficient market power to restrict or negatively impact rival merchants' access to cotton lint," the regulator said in a statement.

Namoi Cotton had earlier

recommended

its shareholders to accept Singapore Olam's A$144.9 million ($94.82 million) takeover offer.

($1 = 1.5281 Australian dollars)