The CMA confirmed, having completed its Phase 1 investigation into the proposed merger, that the deal “raises sufficient concerns” to be referred for a more in-depth review.
The competition watchdog pointed out on Wednesday that the companies are two of the largest grocery retailers in the UK, with overlapping stores in hundreds of local areas, “where shoppers could face higher prices or a worse quality of service.”
The CMA said that the “Phase 2 investigation” will be a more in-depth review, led by an inquiry group chosen from the authority’s independent panel members.
The group will gather evidence around the proposed merger, through multiple customer surveys and engagement with other retailers, suppliers and industry bodies to inform its detailed analysis, the CMA said.
A detailed statement, setting out the issues that the inquiry group expects to investigate, will be published in the coming weeks.
The CMA added that members of the public and other interested groups will then be invited to give their views on the investigation, which is expected to be completed by March 5 2019.