Kerry Foods is confident that the completion of its acquisition of Headland Foods will not be scuppered by its referral to the Competition Commission.

The merger's future was cast into doubt earlier this week after the OFT referred it to the Commission following retailer complaints that the price of frozen ready meals had risen sharply in the wake of the January deal.

M&A experts said the probe was likely to be lengthy and had the potential to derail Headland's ­integration. "The Commission might conclude it's a deal they don't want to happen, in which case they could force Kerry to sell the Headland business," said one source.

However, Kerry told The Grocer it was confident the Commission would wave the acquisition through. It also denied having a monopoly in the UK frozen food sector and defended the price rises.

"Kerry has had to endure raw material and energy cost rises and we're obliged to try and recover those," said a spokesman.

The Commission now has 24 weeks to investigate the case.

"The merged company's large share in the frozen ready meals market compared with that of its competitors corroborated that concern," said OFT chief economist Amelia Fletcher, adding that some price hikes could be attributed to raw material inflation but the balance of evidence "supported retailers' concerns."

While concerns about price increases could be ­resolved by price controls, such remedies were rare in a merger context and could be difficult to police, said competition expert Suzanne Rab, a partner with King & Spalding.

Prior to the merger, Kerry Foods and Headland were the two biggest suppliers to UK ­supermarkets in the frozen ready meal category.