Just Eat’s planned purchase of its takeaway delivery rival Hungryhouse will be investigated by the UK’s competition authority, because of worries the merger could have a negative impact on restaurants.
Just Eat announced that it wanted to buy Hungryhouse in December for £200 million.
But the UK’s Competition and Markets Authority (CMA) is now referring the deal for an “in-depth investigation,” because of worries the deal “could lead to worse terms for restaurants using either company.”
Just Eat was founded in 2001, went public in 2014, and is now present across 13 markets, according to its site. Hungryhouse is its biggest competitor in the UK.
The regulator gave Just Eat a chance to respond, but the firm did not. Now a panel of CMA members will scrutinise the deal and come to a decision on November 2.
Specifically, the CMA said last month the merger could mean a “substantial lessening of competition” in the takeaway delivery market, because Just Eat and Hungryhouse were so similar. It found newer businesses like Uber and Deliveroo weren’t necessarily “direct competition”, because they cover a smaller area, and serve dining-in restaurants rather than takeaways.
There are three possible outcomes of the investigation: the merger is allowed to go ahead; the CMA allows it to go ahead with some conditions; or the CMA blocks the merger.
Just Eat has not responded to a request for comment.