Carphone Warehouse's 236 million acquisition of Tiscali has been approved by EU anti-trust regulators.
The communication giant's TalkTalk arm announced the buy-out plans last month, following growing speculation that it was looking at buying the internet service provider.
Now that the EU has approved the deal, TalkTalk will boast a subscriber base of more than four million.
"The activities of Carphone Warehouse and Tiscali UK overlap horizontally in retail and wholesale internet access provision, as well as in retail fixed line telephony services. The commission's analysis focused in particular on the domestic sector of broadband services, where the merged entity will become one of the main competitors to the incumbent operator BT," the EU said in a statement.
"The commission's examination of the proposed transaction showed that none of the above markets would give rise to competition concerns. The new entity will continue to face competition from a number of strong players, especially BT, as well as from a number of strong alternative operators, including those based on the cable platform. Competition from other technologies, such as mobile telecommunications, is also growing."
Carphone Warehouse has made no official announcement on the ruling, but last month when the acquisition plans were unveiled, Charles Dunstone, the group's chief executive said: "We are delighted to be acquiring Tiscali's UK business - we know the business well and the fit with TalkTalk is perfect
"It also delivers clear shareholder value with significant enhancement to this year's earnings per share and substantial synergies to be achieved next year and beyond. We very much welcome Tiscali's UK customers and staff to TalkTalk. Together we intend to continue leading the way in UK broadband."
