Member Article

Just Eat's £200m Hungryhouse acquisition is facing a prolonged CMA probe

The £200m merger between UK takeaway giant Just Eat and Hungryhouse is to undergo investigation by the Competition and Markets Authority, citing similarities between the two services and the areas they cover.

Announced back in December, the acquisition has the potential to create by far the biggest player in the UK online takeaway market and firmly entrench Just Eat’s predominant position in the space.

However, the CMA has now called on the company to fully address any competition concerns prior to any potential phase 2 investigation which could set the deal back by six months or more.

In a statement, it said: “Following its initial investigation into the merger, the Competition and Markets Authority (CMA) has found that the companies are close competitors because of the similarity of their service and their broad geographical coverage.”

The regulatory body rejected claims that on-demand delivery rivals such as Deliveroo and UberEATS provided sufficient competition in the online takeaway market due to their more localised coverage and servicing of restaurants which commonly lack their own delivery service.

It has given Just Eat seven days to respond prior to a prolonged and in-depth probe in to the deal, which has previously seen businesses offer to sell off parts of their operations or turn their backs on a deal entirely.

The CMA added in its statement: “The merger will now be referred for an in-depth phase 2 investigation by an independent group of CMA panel members - unless Just Eat is able to offer undertakings which sufficiently address the CMA’s competiton concerns.

“Just Eat has until 17 May 2017 to offer proposals to resolve the competition concerns. If it does not offer undertakings, or if the CMA is unable to accept undertakings offered, the merger will be referred for an in-depth phase 2 investigation.”

In its own statement, Just Eat responded: “Just Eat notes the CMA’s decision that it intends to refer its review of Just Eat’s proposed acquisition of Hungryhouse to a “Phase 2” investigation.

“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.”