UK competition regulator investigates SSE, Innogy retail merger

(Reuters) - Britain's Competition and Markets Authority said on Wednesday it had opened an investigation into the merger of SSE's (SSE.L) retail power and gas business in the UK with that of npower, owned by German rival Innogy (IGY.DE).

The investigation will assess whether the deal would significantly reduce competition in the supply of energy to domestic customers in the UK.

The CMA has been discussing the deal with SSE Retail and npower since it was announced in November. The deadline for its initial decision is April 26.

"Now that the companies have provided the information necessary to start an investigation, the CMA has launched its review," the agency said.

If the merger goes through, the combined retail operations of SSE and Innogy, Germany's largest energy group by market value, would challenge British Gas as the country's largest power supplier.

(Reporting By Justin George Varghese in Bengaluru, editing by Larry King)