The Competition and Markets Authority (CMA) has opened its investigation into Tesco’s proposed acquisition of Booker.
Tesco announced in January that it had agreed to combine with wholesaler Booker Group, the owner of the Budgens and Londis brands.
However, the deal has come under intense scrutiny by both the CMA and both groups' shareholders, and there are concerns Tesco could be forced to sell off hundreds of its smaller stores to gain regulatory approval.
Today's announcement by the competition authority will come as no surprise - earlier this year retail boss Lord Stuart Rose said the CMA would be "all over (the deal) like a rash, and they should be".
Shares in both Booker and Tesco were down one per cent at pixel time.
The watchdog said the first phase of the investigation runs until 25 July 2017. During this period, the CMA will "assess whether the deal could reduce competition and choice for shoppers and other customers, such as stores currently supplied by Booker".
After this first phase, the merger will either be cleared or, if the CMA identifies a potential reduction in competition, it will be referred for an in-depth investigation lasting up to 24 weeks - unless the merging parties can offer proposals following the first phase of the investigation which address any concerns identified.
Having ensured it has all the necessary information from the companies before opening the investigation, the CMA is now seeking views on the merger from all interested parties. Those interested are invited to submit their views by 13 June 2017.