Germany's competition watchdog has approved Rewe Group's takeover of 328 of Tengelmann's Plus Stores.

The approval by the Federal Cartel Office follows a move by Rewe this year to buy the Plus stores after Germany's Federal Cartel Office ordered fellow retail giant Edeka, which is merging its Netto discount stores with Tengelmann's Plus business, to sell a number of the outlets to gain the go-ahead for the deal.

Edeka and Tengelmann had months of discussions earlier this year with the anti-trust body following their agreement to merge their Netto and Plus outlets amid concerns that the move would reduce competition.

In order to get the deal through, Tengelmann had to sell 378 Plus stores, located mainly in the east of Germany.

The stores will be taken over by Rewe's discount arm Penny's and will see its turnover increase to EUR7.6bn from EUR6.6bn.

Penny's said that the acquisition will "strengthen its branch network in rural and urban areas".

Penny's has a branch network covering Germany, Austria, Italy, Romania, Hungary and the Czech Republic.