Source: Sharecast
Topps Tiles bought CTD Tiles out of administration in August last year. As part of the deal, Topps bought 30 stores, as well as supporting infrastructure such as stock and all related intellectual property for CTD Tiles, CTD Architectural, and CTD Housebuilders.
Following a Phase 1 investigation, the CMA said it had found that a "small number" of sites in Dorking, Edinburgh, Inverness and Aberdeen created competition concerns in the supply of tiles to retail customers and business customers.
The investigation found both companies compete closely for retail and business customers.
"After reviewing the deal, including internal documents and evidence from customers and competitors, the CMA concluded that in most areas there are sufficient remaining competitors but that in a small number of areas, the deal could lead to worse deals and service for customers," it said.
Joel Bamford, executive director for mergers at the CMA, said: "Topps Tiles now has the opportunity to offer solutions to our concerns, otherwise this case will proceed to a more in-depth investigation."
Topps Tiles said in a statement that it was "pleased to note" the CMA found "that the transaction has generated no competition concerns in the majority of areas reviewed".
Specifically, it said, the CMA agreed with the company that its acquisition of the CTD commercial tile operations - CTD Architectural and CTD Housebuilder - did not raise any competition concerns and that in 26 out of 30 locations where retail stores were acquired no local competition concerns were identified.
"In the four retail localities where the CMA has identified possible concerns (Dorking, Aberdeen, Inverness and Edinburgh) the company now has the opportunity to put forward remedies to address these concerns in lieu of a more in-depth investigation," it said.
"The company will continue to work with the CMA in a constructive and professional manner, as it has done throughout this process."
Topps Tiles has until 24 February to submit proposals to resolve the CMA’s concerns.
At 1255 GMT, the shares were up 4% at 36.40p.