The UK’s Competition and Markets Authority (CMA) has decided to investigate supermarket group Morrisons’ acquisition of convenience store chain McColl’s.

As part of the probe, the CMA will examine whether the deal could ‘substantially’ reduce competition in any markets in the UK.

The watchdog made its initial enforcement order on 25 May, with the launch of the merger inquiry and deadline for the Phase I decision yet to be confirmed.

The order was made in accordance with Section 72(2) of the Enterprise Act 2002.

In its order, the CMA said: “The CMA has reasonable grounds for suspecting that it is or may be the case that Wm Morrison Supermarkets has ceased to be distinct from certain assets of McColl’s Retail Group, Martin McColl, Clark Retail, Dillons Stores, Smile Stores, Charnwait Management, and Martin Retail Group (these assets are collectively referred to as ‘McColl’s’).

“The CMA is considering, pursuant to Section 22 of the Enterprise Act, whether it is or may be the case that a relevant merger situation has been created and whether the creation of that situation has resulted or may be expected to result in a substantial lessening of competition in any market or markets in the UK.”

McColl’s went into administration at the start of this month with a debt of just under £170m ($214.96m).

Morrisons secured the deal to acquire all of McColl’s 1,160 stores, including 270 Morrisons Daily branded stores, in a so-called pre-pack administration, defeating its rival bidder EG Group.

The supermarket chain was purchased by US-based private equity firm Clayton, Dubilier & Rice (CD&R) in October last year for £7bn.

Earlier this month, the CMA said that it was considering accepting a proposal from CD&R to sell 87 petrol station forecourts.

The watchdog had been reviewing CD&R’s Morrisons deal over concerns of potentially higher petrol prices across England, Scotland and Wales.