The Competition and Markets Authority has served an initial enforcement order on JD Sports-owner Pentland over its Go Outdoors acquisition.
The deal includes 58 stores across the UK.
It is claimed the watchdog has served the order to investigate the merger and a potential site overlap. Pentland owns outdoor sports brands Berghaus and Ellesse, and JD Sports controls small chain Ultimate Outdoors.
JD Sports’ other outdoor market assets include Blacks, Millets and Tiso, which generate combined sales of around £155m.
Rumours of the Go Outdoors deal first surfaced in August.
JD Sports chief executive Peter Cowgill branded the chain a “great addition to our existing outdoor business”.
The sports giant launched an investigation into how policies are being implemented at its Rochdale distribution centre earlier this month, after a claim described it as “worse than prison”.