A DEAL to takeover a leading chemicals firm in Bury has been placed on hold by competition chiefs.

Bosses at Holchem, in Pilsworth, announced in December that they had agreed an acquistion deal with American-owned Ecolab.

But officials from the Competition and Markets Authority (CMA) fear the merger of the two outfits would lead to price increases, a lowering of quality within the market and harm levels of innovation.

An inquiry by the CMA has reported back and noted that the new combined entity would have a 40 to 50 per cent market share in the formulated cleaning products sector for industrial food and beverage companies.

A CMA spokesman said: “We provisionally think that the adverse effect arising from the identified (agreement) could be an increase in prices, a lowering of the quality of the parties’ products or customer service (for example, technical support services), a reduction in the range of their products/services, and/or a reduction in innovation.”

The authority has invited submissions from interested parties on their findings before August 29. A final ruling will then be issued, after further consideration.

More than half of the customers surveyed by the CMA felt the move would reduce levels of competition in the market place.

Unveiling the deal last year, Nick Alfano, executive vice president and general manager of global food & beverage at Ecolab, said: We bought Holchem for the people and the brand.

“What everyone will see going forward is the Holchem name and products. That’s the power of what we have acquired.”

Simon Bell, Holchem managing director, was said to believe the merge would create “the best of both worlds” by promoting “world leading research and development.”