The Competition Authority is to investigate the takeover by the State-owned forestry company, Coillte, of the Northern Ireland sawmilling company, Balcas.
The takeover has been referred to the authority by the Minister for Enterprise, Trade and Employment, Ms Harney.
The authority will immediately carry out an analysis of all elements of the deal and will present a report to Ms Harney on March 6th.
Under mergers and takeover legislation, Ms Harney can do one of three things.
She can stop the deal completely, approve it fully or approve it but with certain conditions attached.
Just before Christmas the £4 million takeover was approved by the Government and sources suggest the deal is likely to be approved by Ms Harney, but with conditions attached.
Under the deal, Coillte will acquire 80 per cent of Balcas, which has an annual turnover of £40 million and employs 800 people.
The Irish Timber Council (ITC) has been vociferous in its opposition to the deal, saying it is "completely contrary to the principles of fair competition".
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