The Competition and Markets Authority (CMA) has opened up an investigation into the £7 billion purchase of supermarket giant Morrisons by US private equity group Clayton, Dubilier and Rice (CD&R).
The CMA has said that Morrisons must continue to run as an independent business for the time being, which maintaining its own branding and management.
While it has said it will investigate the deal, the CMA has said it does not prohibit the completion of the deal as long as CD&R and Morrisons observe the restrictions it has set out.
The deal was completed after a rare action that was held due to bids from two competitors CD&R and Softbank subsidiary Fortress Investment Group earlier this month.
The takeover saga had dragged on since CD&R first made an approach for the grocer back in June, leading to speculation the sector was ripe for private equity takeovers.
Following the initial bid, rival Softbank-backed Fortress made an offer of £6.3 billion in July.
The deal has been the highest profile among a series of transactions where US investment firms have targeted British companies as a result of relatively low valuations following Brexit.