The UK competition regulator has approved the proposed merger of discount chain Poundland (LON:PLND) and rival 99p Stores.
The Competition & Markets Authority (CMA) has provisionally concluded that the tie-up is not expected to substantially reduce competition.
Poundland said in a statement that it welcomed the news and was studying the report's findings in detail.
It said it looked forward to working further with the CMA ahead of the publication of the full review in October.
Poundland chief executive Jim McCarthy said: “We welcome the CMA’s provisional clearance of our acquisition of 99p Stores and we look forward to a satisfactory conclusion to its Phase 2 review.
"We continue to believe the acquisition of 99p will be great for customers and for shareholders alike.”