The proposed hostile takeover of UK engineering giant GKN could have "a detrimental impact" on the company's ability to fund its pension scheme, the Pensions Regulator has warned.
Melrose Industries has offered £7.4bn for the 259 year-old firm.
But there are worries over the level of additional debt GKN would take on if the takeover goes ahead.
Bosses of both companies are due before a parliamentary committee on Tuesday as the battle over GKN intensifies.
Ahead of the hearing, the Business, Energy and Industrial Strategy committee published a letter from the Pensions Regulator expressing concern over whether Melrose's takeover would weaken GKN's position in fulfilling its pension obligations.
The Pensions Regulator, said: "From the outset we have been concerned that the increased leverage involved in the proposed takeover by Melrose is likely to have a detrimental impact on convenant".
"Covenant" refers to the company's ability to fulfil its current and future pension obligations.
Companies involved in takeovers can submit details of their plans to the Pensions Regulator and obtain clearance if the regulator is satisfied that they are putting sufficient mitigating measures in place.
However, applying for clearance is voluntary.
The committee's chair, Frank Field, said he thought pensioners would be surprised to hear that a pension scheme could be transferred to a new owner without the Pensions Regulator having a say.
He called for the introduction of mandatory clearance checks for such cases.
GKN's defined benefits pension scheme has 32,000 members including 17,000 who have already retired.
It has a deficit of £1.1bn, despite an additional contribution of £250m made into the scheme last October.
GKN is defending itself against the approach from Melrose, a firm that specialises in buying up industrial companies it believes are undervalued and restructuring them before selling them on.
That has raised fears that GKN, one of the UK's largest industrial firms, will be broken up and sold to overseas owners.
A brief history of GKN
Founded in 1759 as an ironworks in South Wales
Involved in aerospace, automotive, materials and manufacturing engineering
Operates in 30 countries with 59,000 employees
Employs 6,000 staff in the UK mostly in aerospace and automotive technology
Ten UK sites including Bristol, Cowes, Luton, Portsmouth, Birmingham and Telford.
Chief executive Anne Stephens, took over in January
GKN raised the issue of its pension scheme in January, arguing the takeover would put future pension security at risk.
Melrose defended itself saying it had "a long track record of responsibly funding pension schemes" and said there was no cause for GKN pensioners to be concerned.
Melrose also said it had offered to make a voluntary cash contribution of up to £150m into GKN's pension schemes when it first made a bid for the firm.