(Updates with Barco comment)

BRUSSELS (Thomson Financial) - The European Commission said it has opened a detailed investigation into Italy's Itema Holding's proposed 72 mln eur acquisition of Belgian imaging technology group Barco NV's textile unit BarcoVision.

An initial March 31 deadline for the commission's inquiry into the deal was extended after the companies offered remedies to competition concerns raised during the investigation.

But on Monday, the EU executive said that its initial market investigation indicated there were potential competition concerns about the proposed merger.

Itema is active in the production and sale of machinery for textile manufacturing. It is one of the three main companies supplying textile mills with winders -- machines used to stock yarn before it is woven or knitted.

BarcoVision is one of the two main companies which currently produce sensors for winders, an essential device for ensuring textile quality.

'The commission has serious concerns that the proposed transaction might increase the cost or affect the quality of sensors purchased by other winder producers', the European Commission said in a statement.

The in-depth investigation will focus on determining whether the merged group might negatively influence the availability of sensors.

The commission now has 90 working days -- until August 26 -- to decide whether the deal hampers effective competition in the European Union.

Barco said in a statement that the commission's decision 'does not change the intention of both Barco and Itema to go ahead with the agreement and finalise the acquisition in the nearest possible future'.

The groups have extended the deadline to close the transaction to September 30.