Competition watchdogs have given the go-ahead for Poundland (LON:PLND) to buy rival 99p Stores.
The Competition and Markets Authority (CMA) said it had decided that it did not expect the merger to result in a substantial lessening of competition.
Consequently, customers would not face a reduction in choice, value or quality of service as a result of the deal.
It confirms the CMA's provisional findings published in August.
The regulator found that the companies are each other's closest competitors but would still face competition from other discounters such as B&M, Home Bargains, Wilko and Bargain Buys, along with Tesco (LON:TSCO) and to an extent Asda.
It also decided that Poundland would not have an incentive to reduce the quality of its ranges, either at the local or at the national level.
Poundland welcomed the decision and said it would now move to complete the deal by the end of September.
Poundland chief executive Jim McCarthy said: “We welcome the CMA’s decision to clear the merger. We believe the acquisition of 99p Stores will be great for both customers and for shareholders.”