Just Eat’s planned £200 million (US$365.2 million)purchase of rival Hungryhouse has been given provisional clearance by watchdogs who feel the deal will not constrain competition.
The Competition and Markets Authority (CMA) has been chewing over the merger since May when the approach was first made and initially had concerns about the possibility of both customers and restaurants suffering a worse deal from the tie-up.
In June, Hungryhouse complained that the CMA had adopted an “unduly narrow frame of reference” in terms of which type of businesses it considered to be rivals that was “driven by an overly cautious approach”.
Just Eat and Hungryhouse allow customers to order food from local takeaways, but orders are delivered by staff from the individual restaurants, unlike rivals including Deliveroo and UberEats, whose drivers ferry meals to consumers.
The CMA initially considered this a key distinction and therefore ruled in its early assessment of the proposed deal that these delivery businesses could not be called rivals to Just Eat and Hungryhouse and so referred the merger for what is known as a Phase 2 investigation.
But it now seems the CMA has changed its view on this, stating that the likes of Deliveroo and Uber Eats “pose a greater competitive constraint on Just Eat than Hungryhouse does”, adding that “Hungryhouse was a weak competitor to Just Eat”.
Full Content: Financial Times
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