The Competition Authority has cleared the proposed acquisition of Superquinn by Musgrave.
Under the deal, Musgrave will take control of Superquinn's supermarket business and some of its properties.
The competition body said that, after an "intensive" investigation, it believed the deal would not substantially lessen competition.
During its investigation the authority looked at a number of potential problems, including whether the merger would lead to higher prices for consumers, whether it would discourage new competitors from entering the market and whether it could force better terms from suppliers.
Superquinn, which employs 2,800 people, went into receivership in July. It operates 24 stores, mostly in Dublin.
Musgrave is a wholesale distributor of food and grocery products to a network of independently owned retail outlets which operate under the brands of Supervalu, Centra, Day Today and Daybreak. In addition, Musgrave operates a network of seven cash and carry outlets under the brand of Musgrave Marketplace.
