The British competition watchdog is to examine supermarket chain Sainsbury's takeover of Argos' parent Home Retail Group.
The Competition and Markets Authority (CMA) will look into the case to decide if the deal would lead to a substantial lessening of competition for consumers.
The news has taken industry analysts by surprise with the belief that the two operations were substantially different enough not to lead to an investigation by the CMA.
Sainbury's plans to close a number of Argos outlets and relocate them to its own stores. A spokesperson for the retailer said it was looking forward to the successful completion of the deal.
The CMA expects to make its decision by July 25.
Shares in Sainsbury's rose 0.6 per cent to 269.3p on Friday.
In other news Sainsbury’s will work with two additional processers from July of next year to help deliver a "long-term, sustainable supply of fresh British milk".
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