The competition regulator has approved Tesco’s (LON:TSCO) 3.7 billion pounds ($4.95 billion) acquisition of Booker (LON:BOK),  In a statement, the Competition and Markets Authority said it cleared Tesco’s takeover following  a  seven month investigation that revealed that the two firms were not competing ‘head-to-head’ in their activities.

The takeover of Booker, which is Britain’s biggest food wholesaler, gives Tesco an access to Britain’s lucrative catering segment of the food market, estimated to be worth 195 billion pounds. Consequently, the takeover is expected to tighten Tesco’s grip on the food market. The supermarket group is Britain’s biggest food retailer.

The takeover bid, which was announced in January, has been widely criticized by wholesalers who argued that the merger would raise prices of goods and limit competition.

The ruling by the competition regulator comes at a time when Tesco is outperforming its rivals. According to industry data, Tesco was ahead of all its major UK rivals, including Sainsbury, Asda and Morrisons ahead of the Christmas period. The supermarket group controls a 28.2 % share of the retail grocery segment.

The takeover, which is expected to be passed by the two firms’ shareholders in February, could be finalized by March 2018. The takeover is part of Tesco Chief Executive Officer Dave Lewis’s transformation strategy which he initiated shortly after joining the firm in 2014. His effort has recently received a boost following the firm’s improved half-year results, which brought back dividends.

According to Laith Khalaf, a Hargreaves Lansdown analyst, the resumption of dividends is expected to persuade investors into voting for the takeover bid.

The merger will enable Tesco to reach an estimated 450,000 caterers and out of home customers which made up Bookers’ customer base. Booker also supplies over 120,000 retailers through its cash and carry warehouses.

The surprise approval by the CMA disappointed rivals who expected the regulator to restrict some of Tesco’s operations.

Simon Polito, who chairs the inquiry group at CMA said that retailers would continue shopping for the best prices even after Tesco’s merger, adding that the merger doesn’t raise any concerns for Tesco rivals.