The UK’s competition authority has launched a merger inquiry into JD Sports’ acquisition of fellow retailer Footasylum, months after the deal completed.

JD agreed to buy the remaining shares in Footasylum that it did not already own in March of this year, in a cash deal that valued the shoe and clothing chain at £90.1m. Shareholders approved the deal the following month.

The Competition and Markets Authority announced an initial investigation in May, which banned the two groups from integrating their businesses, and on Wednesday said it would launch a full merger inquiry.

JD bought an 8 per cent initial stake in February, but said it was not intending to make an offer to buy its smaller rival. It raised its stake to 18.7 per cent before the deal to buy all the outstanding shares in March.

The two retailers have had a close relationship. Footasylum founder David Makin was one of the two co-founders of JD Sports. Fellow JD Sports co-founder John Wardle was appointed chief executive at Footasylum in 2008, remaining in that post until 2015 when he was succeeded by Clare Nesbitt, Mr Makin’s daughter.

JD’s chairman Peter Cowgill said in March the deal was “very complementary to our existing businesses in the UK” and signalled that there would be “significant operational and strategic benefits through the combination”.

JD did not immediately provide a comment.

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