The CMA has provisionally concluded that the level of competition in the grocery wholesale and retail markets would be sufficient to defeat such a strategy'.
Despite positive results in October, some investors warned that the supermarket giant was not in strong enough shape to execute the merger at present.
"The risk is that just as the good ship Tesco is steadying, it gets blown off course by the Booker deal", he said.
Despite acknowledging that a combined Tesco-Booker would represent 46% of the grocery retail sector, CMA inquiry group chair Simon Polito said competition "is sufficiently strong" to ensure the deal "Will not lead to higher prices or a reduced service for supermarket and convenience shoppers".
Tesco has more than 3,000 stores across the United Kingdom, while Londis and Budgens owner Booker is the country's largest wholesaler.
The regulator said that the two companies don't compete head-to-head in most of their activities, stressing that Tesco doesn't supply the catering sector where Booker makes more than 30% of its sales.
Keller Group plc 59% Potential Upside Indicated by Liberum Capital
WARNING: " RTC Group plc Plans Dividend of GBX 1.20 (RTC)" was reported by Dispatch Tribunal and is owned by of Dispatch Tribunal. The John G Ullman & Associates Inc holds 182,612 shares with $2.27 million value, up from 122,810 last quarter.
Critics saw the deal as creating a business that would bring together the Tesco Express convenience-store chain with other United Kingdom c-store retailers like Budgens, Londis and Premier.
A raft of rival wholesalers have raised concerns the deal could see Booker benefit from improved supplier terms making it hard for them to compete.
It found that it was likely Booker would be able to negotiate better terms from a number of its suppliers for some groceries, and that it was likely to pass on some of the benefits of these savings to the shops that it supplies.
A group of independent Competition and Markets Authority (CMA) panel members has investigated how bringing together the UK's largest grocery retailer and the UK's largest grocery wholesaler would affect competition.
"This merger has always been about growth, and will bring benefits for independent retailers, caterers, small businesses, suppliers, consumers, and colleagues". The provisional decision will now be issued for comment and further evidence before a final sign-off. "We anticipate completion of the merger in early 2018".
Tesco and Booker's market share prices jumped by 5.65 and 5.74 per cent respectively after the news this morning (14 November).