The competition regulator has cleared Tesco's contentious £3.7bn takeover of Booker after a seven-month investigation.
The Competition & Markets Authority said it considered the implications of Britain's biggest supermarket buying the country's largest wholesaler but that it concluded consumers would not be harmed by the deal.
The takeover was announced in January and took the retail market by surprise. Rival wholesalers called for the deal to be blocked and argued it threatened the survival of independent retailers by giving Tesco too much power over grocery buying. A combined Tesco and Booker would be able to drive other operators out of business, they said.
The CMA started investigating the deal in May and in the summer intensified its scrutiny of how the combination might affect Booker's customers, such as Budgen, Londis and Premier, and harm competition in more than 350 areas.
But the regulator decided these shops could choose where to buy products and that competition in the retail sector made it unlikely Tesco would use the merger to raise prices or cut service levels. Most shops use more than one wholesaler and they switch frequently.
Many retailers surveyed said they might ditch Booker if it raised prices, the CMA said. Booker's share of the wholesale market, which is less than 20%, is not big enough for it to force rivals out of business by using Tesco's buying power to purchase more cheaply.
Simon Polito, who chaired the inquiry group, 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's decision is likely to face criticism from retailers, wholesalers and consumer groups. It is also the second long and costly inquiry into a retail merger with no action taken. The CMA cleared Poundland's takeover of 99p Stores in 2015 after changing its mind about the likely effect on competition.
Nick Bubb, an independent retail analyst, said: "Christmas has come early for Tesco and Booker. The wretched CMA has finally and unconditionally cleared the merger on the somewhat surprising grounds that it does not raise any competition concerns."
Tesco said it expected shareholder meetings for both companies would probably take place in February with the deal set to complete in March.