The UK's Competition and Markets Authority (CMA) has opened its investigation into the acquisition of Nisa Retail by the Co-op.
The authority is considering whether the merger 'may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services'.
This initial stage of investigation will continue until at least 23 April, by which time the CMA is to announce whether it is referring the merger for an in-depth phase two investigation.
Last October, the Co-op made a £137.5 million bid to acquire Nisa , which operates a network of member-owned convenience stores across the country.
Nisa's members then voted 'significantly in favour' of the deal, with over 75% approving the move.
The Co-op says that it plans to retain Nisa as a standalone business and brand, including its 1,190 members and 3,200 stores.
“This acquisition provides the opportunity to create an even greater and more compelling member-led presence within the UK convenience sector," said Jo Whitfield, food CEO of the Co-op.
"We believe we have presented a compelling offer for Nisa members, with a future proposition that would bring them our award-winning own-label products and wide range."
Over the Christmas trading period, Nisa reported a 17.7% sales growth, with revenue reaching £277.2 million.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.