Kim Howells, the Competition and Consumer Affairs minister, said bringing together S&N's 2,650 pub estate with Greenalls' 821 pubs would give S&N more than a quarter of the outlets in seven local districts.
To comply with the "beer orders", S&N must dispose of 600-700 outlets and officials at the Department of Trade and Industry said the brewer should ensure sales in the seven, unnamed areas were included. S&N said it was happy to meet the directive.
Mr Howells said he wanted S&N to agree to reduce its pub holdings below 25 per cent in the areas within six months of the completion of the Greenalls deal.
A spokesman for S&N said: "We are delighted to give an undertaking, which allows us to refine our deal slightly."
Shares in S&N ended 2p lower at 556p, while Greenalls slipped 3p to 296p.
Under the long-expected deal, announced in September, S&N bought the Greenalls outlets to expand the geographical reach of its business across the country.Reuse content