* UK regulator unconditionally clears Tesco/Booker deal
* 3.7 bln pound transaction was announced in January
* Tesco/Booker investors to vote on deal in February
* Shares in both companies rise (Adds detail, analyst comment, updates shares)
LONDON, Dec 20 (Reuters) - Tesco, Britain's largest retailer, tightened its hold on the nation's food market on Wednesday when the competition regulator gave final approval for its 3.7 billion pound ($4.95 billion) takeover of wholesaler Booker.
Buying Booker marks the boldest move yet by Tesco Chief Executive Dave Lewis, who took over in 2014, providing the supermarket group with access to the faster growing catering segment of Britain's 195 billion pound food market.
The ruling by the Competition and Markets Authority (CMA) that the deal, first announced in January, does not raise competition concerns, means that Tesco ends the year on a high.
Industry data published last week showed Tesco was outperforming its three major UK rivals - Sainsbury's, Asda and Morrisons - and entering the key Christmas period with trading momentum.
Tesco is already the dominant player with a 28.2 percent share of Britain's retail grocery market.
Analysts expect the transaction to be voted through by Tesco and Booker shareholders at meetings expected in February. The deal would then complete in March.
"Lewis' hand has recently been strengthened by a healthy set of half-year results, which included the resumption of a dividend. That may well be enough to get the shareholder base on board with the deal," said Hargreaves Lansdown analyst Laith Khalaf.
Earlier this year some prominent Tesco investors criticized the deal, saying Lewis was overpaying and that it would distract from the company's turnaround plan. Compass CEO Richard Cousins resigned as Tesco's senior independent director in protest.
Lewis joined shortly before an accounting scandal plunged the retailer into the worst crisis in its history and has been re-building it since.
"OUT OF HOME"
The deal gives Tesco access to the "out of home" segment of Britain's food market, which is growing faster than the "in home" part, given Booker's role as a major distributor to the catering industry.
Booker, the UK's biggest wholesaler, serves 450,000 caterers/out of home customers, and counts chains Carluccios, Wagamama, Byron and celebrity chef Rick Stein as clients.
Booker also owns about 200 cash and carry warehouses and supplies 120,000 retailers, including the Budgens, Londis, Premier and Family Shopper convenience chains, which are run as franchise operations.
The CMA had provisionally cleared the deal in November, having formally opened its investigation in May.
That unconditional approval surprised analysts and disappointed wholesale and retail rivals who had expected the CMA to insist on some store divestments or restrictions on operations from Tesco.
"Retailers have told us that they shop around for the best prices and service from their wholesaler, and we are confident that this will continue after Tesco buys Booker," said Simon Polito, chair of the CMA inquiry group.
For each Booker share Tesco is offering 0.861 new Tesco shares and 42.6 pence in cash.
Tesco shares were up 0.3 percent at 1233 GMT, while Booker's were up 0.5 percent. Booker shares are up 31 percent so far this year, while Tesco shares are flat.
Tesco's move on Booker has already sparked further consolidation in the UK grocery market as supermarkets seek additional sources of growth and uses for excess capacity in their supply chains. ($1 = 0.7459 pounds) (Editing by Paul Sandle, Keith Weir and Adrian Croft)