The £1.2billion tie-up of supermarket sandwich makers Greencore and Bakkavor will face a formal investigation by Britain's anti-trust watchdog.

FTSE 250-listed Greencore's acquisition of its rival, announced in early April, is set to create a UK food-to-go giant with a combined revenue of around £4billion.

But unions have warned the Greencore deal could result in up to 1,500 job losses as well as factory closures.

The Competition and Markets Authority, which launched an 'invitation to comment' on the Greencore-Bakkavor deal in July, said on Monday it now has ‘sufficient information…to enable it to begin an investigation’.

The regulator is concerned the deal could result in a 'substantial lessening of competition within any market or markets in the UK for goods or services'.

Greencore is a prepared food specialist, which supplies all major supermarkets, including Marks & Spencer.

The group, which has its headquarters in Dublin, with a British head office in Worksop and 14 factories, supplies nearly 750million food-to-go items each year and employs around 13,300 staff.

London-based Bakkavor employs 17,200 staff across 41 locations in Britain, the US and China.

It makes around 3,500 different freshly prepared food products, including meals, salads, desserts, dips, sauces, sandwiches, and pizza and bread products.

The CMA has now launched a ‘phase one’ investigation into the deal and will determine whether it must be referred for a more intense ‘phase two’ probe by 27 October.

Greencore and Bakkavor have previously expressed confidence in a positive outcome from any phase one investigation.

They told shareholders earlier this year: ‘[The deal] will drive significant benefits for their customers and consumers and make a significant continuing contribution to the UK economy.

‘[Greencore and Bakkavor] are confident in their approach to securing approval of the transaction by the CMA in a phase one investigation without undertaking any remedies that are material to the combined group.”

The pair think the combination will be finalised early next year.

Bakkavor boss Mike Edwards said in a statement on Monday: 'Following a period of constructive engagement with the CMA, we are pleased that they have announced the commencement of a phase one review of the acquisition of Bakkavor by Greencore, as expected. 

'We welcome moving forward to this next step in the process within our anticipated timeline and look forward to continuing to working closely with the CMA over the coming months as it carries out its review.'