CMA ‘satisfied’ there are no competition concerns with Just Eat merger, as food delivery apps become vital lifeline during coronavirus pandemic lockdown
The UK’s competition regulator has approved the £6.2 billion merger of Just Eat and Takeaway.com, only days after giving its provisional approval for Amazon to invest millions into rival Deliveroo.
Approval from the Competition and Markets Authority (CMA) came as the two companies announced they had raised 700m euros (£613m) in new financing, in the form of new shares and convertible bonds, intended for paying down debt and pursuing business development.
The companies said they would use the new funds to partially pay down revolving credit facilities, for general corporate purposes and to provide the “financial flexibility to act on strategic opportunities which may arise”.
The new funding depends upon Just Eat and Takeaway.com being admitted to trade as a merged company, which the companies esxpect to become effective on 27 April.
The CMA had become involved in the merger at the eleventh hour after becoming concerned that the merger could have prevented Takeaway.com from re-entering the UK market.
But it said it was now “satisfied that there are no competition concerns”.
The regulator said it had a duty to consider whether “customers could lose out” in the case of a merger.
“In this case, we carefully considered whether Takeaway.com could have re-entered the UK market in future, giving people more choice,” the CMA said.
“It was important we investigated this properly, but after gathering additional evidence which indicates this deal will not reduce competition, it is also the right decision to now clear the merger.”
The companies announced their intention to merge last year in the face of competition from Uber Eats, Deliveroo and others.
Prosus, a unit of South African internet group Naspers, then carried out a sustained, hostile bid for Just Eat that was finally unsuccessful.
That was followed by the CMA’s probe, during the course of which Just Eat and Takeaway.com were forbidden from integrating their businesses. The CMA removed that restriction two weeks ago.
Food delivery apps have become a lifeline during coronavirus pandemic lockdowns, although orders have been affected by the temporary closure of many of the restaurants that formerly supplied customers via such tools.
But last week Just Eat said in a trading statement that while it had seen an initial reduction in orders in mid-March, when the UK’s lockdown orders first came into effect, order volumes had “recovered quickly”.
Just Eat Takeaway.com chief executive Jitse Groen said earlier in April that customers turned to online orders when bored of being stuck at home.