Dec 22 (Reuters) - British water company Pennon Group (PNN.L) said it will offer undertakings to the UK"s competition regulator by Dec. 31 as part of a review of its 425-million-pound ($563 million) acquisition of smaller rival Bristol Water (BTW_pa.L). Pennon said its proposed undertakings would seek to maintain separate price controls for the Bristol Water region within a merged water business. In June, Pennon bought Bristol Water in a move to expand its South West Water business. Britain"s Competition and Markets Authority said earlier on Wednesday the deal was likely to affect the water regulator Ofwat"s ability to make comparisons between water companies. The Water Services Regulation Authority, or Ofwat, is the agency responsible for the economic regulation of the water and sewage industry in the UK. The CMA, which has until Jan. 10 to decide whether to provisionally accept the undertakings, will refer the deal to an in-depth investigation if no undertaking is offered, it said.