Lonmin’s merger with a South African rival was dealt another blow on Tuesday after the competition watchdog said it will investigate the tie-up. The Competition and Markets Authority, under pressure after blocking other rescue deals, will examine if the proposed $383 million (£283 million) deal with Sibanye-Stillwater would make the platinum market less competitive. The union would create one of the world’s biggest platinum producers if it goes ahead, controlling a 25% chunk of the market. The CMA said it will consider whether the tie-up will lessen competition “within any market or markets in the United Kingdom for goods and services”. However, City folk have argued that it will be given the okay because it is technically a rescue deal. Lonmin, the loss-making firm from the late tycoon Tiny Rowland’s sprawling Lonrho empire, admitted yesterday its cash pile had shrunk from $75 million to $17 million. Sibanye-Stillwater has said it wants Lonmin to have cash in the bank, though it’s not a formal requirement. The precious metal company insisted it was on track to be cash positive. The takeover will require further approval in South Africa as well as the nod from shareholders.