The Competition and Markets Authority has referred the $1.8 billion Diebold/Wincor merger for an in-depth investigation after the US ATM manufacturer failed to resolve competition concerns about the supply of customer-operated cash machines in the UK.
The watchdog suspects that Diebold's takeover of Germany's Wincor Nixdorf will substantially reduce competition in the UK ATM market, leaving only NCR as a credible competitor.
The CMA first raised its concerns earlier this month, giving Diebold until 26 August to offer proposals to address the situation.
"As Diebold has not offered satisfactory undertakings, the CMA will therefore now refer the merger," says the watchdog.
The referral is at odds with action taken by competition authorities in other countries, but the CMA says that the UK has a different landscape in relation to the number of providers and barriers to entry into the market.
A decision on the merger will be made by a group of independent panel members supported by a case team of CMA staff. The deadline for the final report is 13 February 2017.