Justice French handed down his decision earlier today following a three-week hearing in Melbourne.

"AGL welcomes the Federal Court's decision and is pleased that a clear outcome has been achieved. This result supports AGL's long-held view that its proposed involvement in the purchase of Loy Yang A will not lead to a substantial lessening of competition," said AGL managing director Greg Martin.

"AGL and the other Great Energy Alliance Corporation (GEAC) consortium members will now meet with the Loy Yang vendors to discuss the next steps to complete the Loy Yang A acquisition," Martin added.

The Australian Competition and Consumer Commission (ACCC) chairman Graeme Samuel stood firmly opposed to the deal claiming it creates substantial competition concerns which are potentially in breach of section 50 of the Trade Practices Act 1974.

"It would lead to a less competitive and less efficient market structure in Victoria and, potentially, in the National Electricity Market.

"This is likely to result in higher prices, increased barriers to entry and a resulting substantial lessening of competition. Therefore, the ACCC will oppose AGL acquiring an interest in Loy Yang Power," said Samuel.

According to the ACCC the proposed acquisition would result in the re-aggregation of AGL's electricity retail and distribution businesses in Victoria with the largest and lowest cost generator in Victoria. AGL is also the dominant electricity retailer in South Australia.

However, the path has now been cleared with only a few remaining conditions precedent to the conclusion of the transaction to be finalised, including the relevant approvals from the Loy Yang A banking consortium and resolution of stamp duty.

GEAC was formed earlier this year by AGL, The Tokyo Electric Power Company Incorporated (TEPCO) and a group of financial investors led by the Commonwealth Bank to acquire Loy Yang A.