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(Reuters) -Britain's regulator on Friday flagged competition concerns on a deal between Finnish firm Konecranes and cargo handling machinery maker Cargotec, saying it would lead to UK customers having fewer alternative suppliers.
The companies provide container handling equipment and services to port terminals and other industry customers globally.
They announced a merger of equals in October 2020, giving them then a combined market value of around 4.5 billion euros ($5.06 billion).
The Competition and Markets Authority (CMA) launched an investigation into the deal in July, its first in-depth probe done in parallel with a review by the European Union since Brexit.
In its provisional findings, the CMA said it was concerned the deal could lead to lower service quality or higher prices for port terminals.
"Our competition concerns need to be addressed to ensure that these customers are not worse off as a result of the deal, and there is no negative impact on UK consumers and businesses," Chair of the CMA inquiry group, Martin Coleman, said.
The companies said they were in dialogue with regulators and expect the merger to complete in the second half of next year.
The final report by the CMA is due by April 1.
A decision by EU antitrust regulators, which launched a full scale probe in July over similar concerns raised by the CMA, is due by Jan. 13.
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Arun Koyyur)