The Competition and Markets Authority (CMA) said it is investigating the completed acquisition by Manchester-based Co-operative Group Limited of The Southern Co-operative Limited.

“The CMA has decided, on the evidence currently available to it, that it is or may be the case that this merger has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom,” said the CMA.

“This merger will be referred for an in-depth, phase 2 investigation unless the parties offer an acceptable undertaking to address these competition concerns.

“The full text of the decision will be published shortly.”

In April, the Manchester-based Co-op Group, a member-owned mutual, announced a proposal to join forces with Southern Co-op “to create a co-operative society with greater scale, resilience and impact for members, customers, colleagues and communities across the UK.”

If approved, the proposal would result in 300,000 Southern Co-op members joining the seven million members of the Manchester-based Co-op Group as members of an enlarged Co-op Group.