UPDATE 1-UK competition watchdog investigating Sabre's takeover of Farelogix

(Adds Sabre comment)

Sept 2 (Reuters) - Britain’s competition watchdog on Monday launched an investigation into the U.S. travel technology provider Sabre Corp’s proposed $360 million acquisition of smaller rival Farelogix Inc, saying the deal could raise prices for platforms used by airlines and travel agents to sell tickets.

The UK Competition and Markets Authority’s investigation follows an initial review of the deal by the regulator last month and comes two weeks after the U.S. Justice Department sued to block the merger, escalating pressure on the companies to call off the combination.

Both Sabre and Farelogix provide information technology systems that allow hotel and airline bookings through travel agencies.

"We've found Sabre's proposed takeover of Farelogix could lead to higher prices for IT systems used by airlines & travel agents ...," the UK watchdog said, adding that it had referred the deal "for an in-depth investigation."

Sabre, which planned to close the merger by Aug. 21, last month extended the termination date of the acquisition agreement to April 30 to allow time for any challenges to be resolved.

Sabre on Monday said it has noted the actions taken by the CMA and the company was working “constructively” with the authority to demonstrate the benefits of the deal for airlines, travel agents and consumers.

“The deal will accelerate access to next-generation retailing, distribution, and fulfillment products and services that the market needs,” Sabre said in a statement.

Southlake, Texas-based Sabre reported 2018 revenue of $3.9 billion, while Miami-based Farelogix had $42 million in revenue last year.

Reporting by Ankit Ajmera in Bengaluru; Editing by Steve Orlofsky and Nick Zieminski