Competition authorities have launched an eleventh-hour review into Takeaway.com and Just Eat’s £6bn merger, throwing one of the UK’s biggest tech deals in recent years into doubt.
The UK’s Competition and Markets Authority on Thursday said it would “open an investigation into this transaction”, threatening to hold up a deal that had been scheduled to close within days.
The probe follows a months-long review of Amazon’s planned minority stake in Deliveroo, Just Eat’s biggest British rival. Both cases centre on whether the deals would prevent a large new entrant from joining the UK’s vibrant food delivery market.
The Netherlands-based Takeaway said the CMA was “unexpectedly” assessing whether it would have entered the UK market without the Just Eat deal.
Under CMA rules, Just Eat and Takeaway could still close their deal during the investigation. But the two companies are expected to face an “enforcement order” that would stop them from being integrated while under review.
Takeaway was set to rename the combined company “Just Eat Takeaway.com” on Friday, and trading in the new stock had been expected to begin on Monday. Takeaway said it was “reconsidering” the timetable.
Takeaway shut down its online food ordering service in the UK in August 2016 after struggling to compete with Just Eat, Uber Eats and Deliveroo. It has since become one of Europe’s largest operators, servicing 11 countries and processing tens of millions of orders a year. “Takeaway.com confirms that it did not have the intention to re-enter the UK market absent the transaction with Just Eat, for which negotiations began in 2019,” the company said.
The food delivery market around the world is consolidating rapidly, as operators hope that global scale and reduced competition will accelerate profitability. This week, Uber announced it was selling its Indian business to local rival Zomato. Last year, Takeaway bought Delivery Hero’s German business and Silicon Valley-based Square sold its Caviar unit to SoftBank-backed DoorDash.
Takeaway expressed surprise at the CMA’s last-minute intervention, saying the regulator had “reconsidered its position”. However, under UK rules, the CMA’s merger intelligence committee is only able to begin a review once a deal is agreed. Just Eat’s investors only voted to approve Takeaway’s all-share deal two week ago, spurning a cash offer from Prosus, Naspers’ international dealmaking unit.