A potential merger between energy suppliers SSE and Npower has been referred for an in-depth investigation after concerns were raised over prices.

The Competition and Markets Authority (CMA) said the deal could reduce competition among the 'big six' energy firms, leading therefore to higher prices for some customers.

The industry watchdog said: "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.

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"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."

Alistair Phillips-Davies, Chief Executive of SSE, said the company is looking forward to working constructively with the CMA as its carries out its detailed investigation.

"A Phase 2 referral is a well-established process for transactions of this nature and we remain confident that the proposed merger will deliver benefits for customers and the energy market as a whole," he said.

"The formation and listing of the new company remains on track for completion in the last quarter of 2018 or the first quarter of 2019."

(LM/MH)