CADE, Brazil's antitrust division, is investigating Localiza's proposed merger with Unidas, according to NASDAQ. The regulator is looking into claims that the combined group may have too much market control and reduce competition.
In a statement, CADE noted that the new company would have "at least 60% to 70%" of the market share, and at some airports "would be the only option for consumers," according to the news source.
It would also reduce the number of car rental companies operating across Brazil to two from three.
With a fleet of about 470,000 cars, the combined company would be worth about 50 billion reais ($9.5 billion).