The rescue deal by Morrisons of troubled retailer McColl's is being investigated by the Competitions and Markets Authority (CMA).
The CMA has confirmed that it has launched the inquiry, issuing an initial enforcement order, over concerns that it lessens competition in the UK.
It means that while the investigation is underway, Morrisons and McColl's must compete as usual with no integration of the two businesses.
No timeframe has been set for the investigation but the CMA does have the power to request the closure of shops in areas where there is a risk of a monopoly, lessening choice for shoppers.
Bradford-based Morrisons, owned by US private equity firm Clayton, Dubilier & Rice-owned announced on May 9 that it had acquired all of McColl’s 1,160 stores, which include 270 Morrisons Daily format stores, saving 16,000 jobs.
It beat a rival bid by the billionaire Issa brothers' EG Group.
