Tesco has tightened its hold on the UK's food market when the competition regulator gave final approval for its £3.7 billion takeover of wholesaler Booker.
The Competition and Markets Authority (CMA) said it had concluded the deal, first announced in January, does not raise competition concerns.
Its ruling clears the way for Tesco and Booker shareholders to vote on the transaction in February and completion the following month.
The Booker deal is the boldest move yet by Tesco chief executive Dave Lewis, providing the supermarket group access to the faster growing "out of home" food market, given Booker's role as a major distributor to the catering industry.
Clients of Booker, the UK's biggest wholesaler, include chains such as Wagamama, Carluccio's, Byron and celebrity chef Rick Stein, as well as thousands of independent caterers.
Booker also owns about 200 cash and carry warehouses in the UK and supplies the Budgens, Londis and Family Shopper convenience chains, which are run as franchise operations.
The CMA had provisionally cleared the transaction in November, having formally opened its investigation in May.
That unconditional approval surprised analysts and disappointed wholesale and retail rivals who had expected the regulator would insist on some store divestments or restrictions on operations from Tesco.
The CMA said a group of independent panel members had examined all submissions received since its provisional findings before coming to the final view.
"We have carefully listened to feedback from retailers and wholesalers who operate in what are highly competitive UK retail and wholesale sectors," said Simon Polito, chair of the inquiry group.
"Retailers have told us that they shop around for the best prices and service from their wholesaler, and we are confident that this will continue after Tesco buys Booker," he added.
For each Booker share, Tesco, which welcomed the CMA's decision, is offering 0.861 new Tesco shares and 42.6 pence in cash.
Booker shares are up 32% so far this year, while Tesco shares are flat.
Tesco's move on Booker has sparked further consolidation in Britain's £185 billion grocery market as supermarkets seek additional sources of growth.
Analysts expect more M&A activity as supermarkets seek to utilise excess capacity in their supply chains.
Sainsbury', the UK's second biggest grocer, considered a bid for the Nisa convenience chain before the Co-operative Group secured a £138m deal.
Morrisons, the fourth biggest UK supermarket group, has also signed a wholesale supply deal with the McColl's chain.
