Just Eat’s (JE) takeover of rival takeaway delivery service Hungryhouse is facing in-depth scrutiny by the competition watchdog over fears the £200m merger could result in restaurants getting a worse deal.
The Competition and Markets Authority will launch a full ‘phase 2’ inquiry into the deal unless Just Eat can address its concerns.
Following its initial investigation into the merger, the regulator decided the two companies are close competitors because of the similarity of their service and broad geographical coverage. The CMA said that more recent entrants to this market offering delivery services – such as Deliveroo, Uber Eats and Amazon Restaurants – represented less direct competition to the companies as these tended to target different types of restaurant.
“The CMA is therefore concerned that the loss of competition resulting from the Just Eat/Hungryhouse merger may result in worse terms for restaurants using either of the two companies,” a statement added.
Just Eat has until 17 May to offer proposals to resolve the competition concerns before the case is referred to the in-depth investigation stage.
“Just Eat looks forward to cooperating with the CMA and is committed to demonstrating to the CMA that the market is, and will remain, competitive following completion of the proposed transaction,” the business said this morning. “In the meantime, Just Eat will continue to operate its business as usual.”
Shares in the group fell 1.1% to 558p as markets opened this morning, but the stock has since clawed back losses and is currently trading 0.2% down at 562.6p this lunchtime.
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