The CMA said in a statement this morning that it had provisionally found that Tesco's anticipated acquisition of Booker "may not be expected to result in a substantial lessening of competition within any market or markets for goods or services in the United Kingdom". The CMA has denied this could happen, believing that retailers would change symbol groups or seek new suppliers if prices increased.
It examined evidence from Tesco and Booker, which represent the UK's largest retailer and wholesaler respectively, as well as evidence from over 65 wholesalers, suppliers and retail chains, and a survey of hundreds of retailers. In particular, Tesco does not supply the catering sector to which Booker makes more than 30% of its sales.
The watchdog also ruled that the move was unlikely to increase prices or reduce services in locations with both a Tesco and a Booker-supplied supermarket due to the strong competition that exists in both the grocery wholesale and retail markets.
Booker is the country's largest wholesaler and owns Londis and Budgens as franchised outlets, and the CMA has previously said it was anxious that shoppers could face worse terms when buying their groceries as a result of the deal.
Those opposing or supporting the deal have until "early December" to try and influence the deal through writing to the CMA. Strong competition in the market ensures that shoppers can choose the best deal for them.
Last month seven of the UK's largest wholesalers who all voiced concerns that the deal would "threaten the survival of the independent retailer".
The CMA opened its phase 1 investigation into the merger in May.
But while the CMA's findings remove uncertainty over the deal, he said the focus will now shift on to whether investors will approve the takeover.