The UK’s Competition and Markets Authority (CMA) said it has referred the proposed merger of Perth-based SSE Retail and Npower for an in-depth investigation “after finding competition concerns.”

“Today’s decision follows the Competition and Markets Authority’s (CMA) initial Phase 1 investigation which found that the deal could reduce competition, potentially leading to higher prices for some bill payers,” said the CMA.

“SSE and Npower did not offer measures to address the CMA’s concerns, and so it has referred the merger for a more in-depth, Phase 2 investigation.

“A decision on the merger will now be made by a group of independent panel members supported by a case team of CMA staff.

“The deadline for the final report is 22 October.”

Energy giant SSE said in November it agreed to demerge its household energy and services business in Great Britain with Innogy subsidiary Npower to form a new listed UK company.

The combination, if allowed, would create the UK’s second largest energy supplier.