The proposed merger of Tesco and Booker is set to complete after gaining formal approval by the Competition and Markets Authority (CMA) this morning following an in-depth investigation.

The decision means the proposed deal, first announced in January, is now able to proceed to a shareholder vote. The decision follows the CMA’s provisional clearance of the merger in November.

Chair of the inquiry group Simon Polito said: “We have carefully listened to feedback from retailers and wholesalers who operate in what are highly competitive UK retail and wholesale sectors. 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.

“This has been an important investigation for us. Millions of people use their local supermarket or convenience store to buy their groceries or essentials, so it is vital that they have enough choice to secure the best deal for them. Having examined the evidence in depth, we are satisfied this will remain the case following the merger.”

The CMA found that the merger did not raise competition concerns on the basis that Booker did not own the shops it supplies. These retailers are free to set their prices and decide which products to stock, it added.

Therefore, although these shops compete with Tesco, Booker cannot directly determine how they compete, it said in a statement today.

The competition authority considered the impact of the merger in every local area where a Tesco and a Booker-supplied store co-existed. It concluded that, in a scenario in which the merged company raised prices or reduced service levels in retail or wholesale, the level of competition would be sufficient to defeat such a strategy.

In response to the CMA’s annoucement, Booker said in a statement: “Booker welcomes the announcement from the Competition and Markets Authority that it has given unconditional clearance of the company’s proposed merger with Tesco PLC.

“Subject to the approval of the Court, it is expected that the scheme circular will be published by Booker during the week commencing 5 February 2018. Subject to the approval of the UK Listing Authority, it is expected that the Tesco shareholder circular and prospectus will be published at the same time.”

A spokesman for Tesco added: “We anticipate respective shareholder meetings towards the end of February 2018, and completion in March 2018.”