The Office of Fair Trading is investigating the acquisition by Ridgeway Group of Parkview Skoda on the grounds it may be anti-competitive.
Ridgeway announced the purchase of the Reading business on November 1. It also operates Jewson Skoda in Oxford.
The OFT statement reads: "The Office of Fair Trading is considering whether arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the UK."
James Fawcett, head of corporate at legal firm Gordons, said: “Following on from the OFT’s investigations into the JCT600/Gilder and Lookers/Shields deals, this latest review into what appears to be a relatively small transaction is further evidence of the OFT’s current focus on the sector.
"This demonstrates a real tension between the manufacturers’ ability to create distinct areas of selective distribution through their dealer networks – in accordance with the block exemption - and the competition authorities’ obligation to ensure that there is no significant prospect of a substantial lessening of competition caused by a merger.”
The OFT is giving until December 16th for submissions on competition or public interest issues.