LONDON – Food delivery firm Just Eat’s planned acquisition £200 million of rival Hungryhouse just took a big step forward.
On Thursday, the UK Competition & Markets Authority provisionally approved the takeover, saying it was “unlikely to result in competition concerns.”
The regulatory body cited new entrants in the food delivery sector like UberEats, Deliveroo, and Amazon as evidence of why the merger shouldn’t damage competition.
This doesn’t mean the deal is guaranteed, however. Now the CMA has published its provisional conclusions, it is asking for written submissions in response. After the deadline for those closes (November 2), it will make a final conclusion.
In a statement, inquiry chair Martin Cave said: “We carefully assessed competition in this rapidly evolving industry to make sure this merger would not result in increased prices or reduced quality of offering for either restaurants or their customers. We obtained evidence from all the major industry participants and carried out surveys, with the public and restaurants, to understand how the merger could impact both types of customers.”
He added: “We found that Hungryhouse was a weak competitor to Just Eat and so competition is unlikely to be substantially reduced by this merger, especially given the entry and rapid expansion of innovative suppliers in this sector.” (You can read a full summary of the provisional findings here.)
The merger was first announced in December 2016 – but it ran into difficulties over the CMA’s concerns it could damage competition and leave restaurants with a worse deal. Accordingly, in May 2017 the CMA said it would conduct an “in-depth investigation.”
Founded in 2001, Just Eat went public in 2014 and now operates in 13 markets with over 64,000 restaurants and 14 million customers worldwide, the British company says.