Updates with details from regulator, background and shares from paragraph 2

May 15 (Reuters) - Britain's competition regulator on Friday said it would clear Getty Images' GETY.N proposed $3.7 billion merger with Shutterstock SSTK.N if the latter sells its editorial arm to address concerns around news content supply in the country.

The decision follows an in-depth investigation launched in November by the UK's Competition and Markets Authority (CMA) after initial remedies offered by the U.S.-based companies had failed to address the watchdog's concerns.

Getty Images and Shutterstock did not immediately respond to requests for comment. The companies' stocks were up 3.8% and 1.1%, respectively, in U.S. premarket trading.

The CMA on Friday said the companies had since offered to divest Shutterstock's global editorial business, home to brands such as Backgrid and Splash, which they described as non-essential to their core operations.

The regulator's independent inquiry group found that the editorial business, if not sold, would reduce choice for UK media outlets and could ultimately raise prices for customers , saying Shutterstock is one of the "few meaningful" rivals to Getty.