The UK competition watchdog said today a takeover of sports retailer Footasylum by larger rival JD Sports could leave shoppers worse off.
The watchdog said a sale of the business might be the only way to protect consumer interests.
The Competition and Markets Authority (CMA) said it was concerned that the loss of competition resulting from the merger could mean shoppers would see fewer discounts from clearance sales and promotions, a lower quality of customer service and less choice in stores and online.
JD, which valued Footasylum at up to £90m, said it will continue to make its case to the CMA in the coming weeks as the deal will benefit both consumers and the UK High Street.
"We anticipate that Footasylum will contribute less than 2% of the group's earnings in the year to January 2020," JD said.
The company said that earnings are expected to be at least equal to the top end of market expectations between £403m and £434m.
The CMA said it would ask for views on its provisional findings by March 3 and possible remedies by February 25 and will assess all evidence before making a final decision.
The deadline for its final report has been extended to May 11.
