The Competition Commission has cleared a merger between struggling Thomas Cook's UK retail business and those of the Co-operative group and Midlands Co-operative Society, to create the country's biggest retail travel operation.
The deal will bring together three of the biggest travel agents on the high street. Thomas Cook currently has 780 stores, while the Co-op has 360 travel shops and the Midlands 100.
"The CC has concluded that the acquisition will not result in a substantial lessening of competition in any markets in the UK, in particular for customers buying package holidays from high street travel agents," the Commission said.
"Therefore, customers are unlikely to suffer from significantly higher prices or reduced choice as a result of the joint venture," it added.
Thomas Cook recently gave its third profit warning in a year, leading to the departure of its chief executive, following dismal trading in its British retail business and some observers have questioned the timing of further expansion on the high street.
It is currently conducting a strategic review of its British business where sales have been hit by tough economic conditions which have hit its core customer base of young families with children particularly hard.
Rival TUI Travel, which owns the Thomson and First Choice chains, has fared better, selling to a broader demographic base.
Thomas Cook plans to conduct its tour operator business separately from the joint venture.
The commission had provisionally given the go-ahead for the joint venture in July.
City A.M. Reporter