The sale of the Kays and Great Universal mail order catalogues to Littlewoods is to be referred to competition authorities, the Department for Trade & Industry has said. Earlier this year, GUS agreed to sell the businesses for �590m to the Barclay brothers-owned Littlewoods group.
In a statement, Secretary of State for Trade & Industry Patricia Hewitt said she had been advised that the deal entailed "a significant prospect of a substantial lessening of competition in mail order and the related activity of business to consumer parcel delivery".
Manchester-based GUS decided to sell the catalogue businesses in order to cut its debt levels.
The Barclay brothers - who are thought to be among the richest people in Britain - bought Littlewoods last year for �750m.
When the Liverpool-based Littlewoods business attempted to buy the Freemans catalogue business in 1997, it was blocked by UK regulators.
But Littlewoods had said it was confident the latest deal would be approved as the agency home shopping market has been losing market share.
The competition commission is due to report by 23 December.
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