JD Sports Fashion has been prevented from fully moving ahead with the integration of Go Outdoors, the large-scale outdoor retailer it agreed to purchase for £112.3 million (€130.2m-$140.7m) in cash and £16 million in debt last November, due to a review of the acquisition by the U.K.'s competition watchdog, the Competition and Markets Authority (CMA).

If approved, the deal would reinforce JD Sports Fashion's position in the British outdoor market. Its outdoor retailing division already comprised the Blacks, Millets and Ultimate Outdoors chains, among others. This business unit, combined with Go Outdoors and its 58 stores, yielded a pro forma turnover of £357.2 million (€414.3m-$447.8m) for the year until the end of January 2016.

But in December, the CMA served an initial enforcement order on JD Sports Fashion and its majority shareholder, the Pentland Group, in relation with the completed acquisition of Go Outdoors. Under this order, JD and Pentland are required to hold Go Outdoors as a separate entity, until the investigation is complete. Since then, some exemptions have been granted, for example allowing JD to obtain sales and financial information that is required to meet its reporting obligations, or to sort out credit arrangements for Go Outdoors.

The CMA may be studying overlaps between the retail operations of the two companies, but it has been suggested in British newspapers that the authority may also be studying vertical integration, since the majority of JD Sports Fashion belongs to Pentland, the owner of Berghaus and many other brands. The timeline for the next steps has yet to be confirmed. The options include full clearance, clearance with measures to address competition issues, or the launch of a merger inquiry. Should such an investigation go ahead, the CMA would have up to 40 working days to decide on its outcome. JD declined to comment.