Sun. Oct 25th, 2020

Competition inquiry casts shadow over Takeaway’s Just Eat deal

3 min read

By Toby Sterling

AMSTERDAM (Reuters) – Dutch food ordering firm is pressing ahead with its 6.2 billion pound takeover of Just Eat despite a shock last-minute setback when the UK competition authorities said they will probe the deal to create one of the world’s largest meal delivery companies.

Takeaway said on Friday the investigation by Britain’s Competition and Markets Authority (CMA) would only delay completion of the takeover until the end of next week.

Depending on initial findings, the CMA could decide to launch a formal investigation into whether the deal would reduce competition in the market.

Should that happen, could be prevented from further integrating the two businesses until the investigation is concluded.

The probe is the latest twist for Takeaway in its attempt to buy Just Eat, which it first announced in August, and it comes weeks after Takeaway won a months-long bidding war with rival suitor Prosus.

Takeaway disclosed the probe late on Thursday, adding that the regulator would be looking into whether it would have re-entered the UK market without the current deal in place.

“ confirms that it did not have the intention to re-enter the UK market absent the transaction with Just Eat,” the Dutch company said, adding it would respond to the CMA’s questions and that it was confident of getting a green light.

The CMA is already investigating plans by Amazon to lead a 575 million pound investment in rival Deliveroo.

Takeaway shares fell 2.2% to 83.85 euros per share in Amsterdam, while Just Eat shares fell 3.7% to 848.2 pence in London.


Takeaway pulled out of the UK market in August 2016 after making losses and struggling to gain significant sales volume. Just Eat sold its operations in the Benelux to Takeaway the same month. Financial details were not disclosed.

“We do not expect the CMA investigation to prevent the Just Eat Takeaway combination, given Takeaway’s lack of UK market presence,” said Citi analysts in a note.

“However, we expect this announcement to raise questions around the potential for in-market consolidation in UK online food delivery in the medium-term.”

Investor Cat Rock, which holds 3% of Just Eat shares and 6% of Takeaway shares, slammed the investigation.

“The CMA’s investigation seems to draw a false equivalence between’s merger with Just Eat and Amazon’s investment in Deliveroo,” Managing Parter Alex Captain said in a statement.

“Amazon has a large UK business with millions of customers that it could leverage to re-enter the UK online food delivery market and increase competition. has no such UK presence, customer base, or brand name. It is patently absurd to compare with Amazon when evaluating the outlook for future competition.”

Just Eat describes itself as Britain’s “leading” food delivery company, with 385 million pounds in UK revenue in 2018. Just Eat estimates the overall British market for food takeaway and food delivery combined at 16 billion pounds annually.

Major competitors include London-based Deliveroo, and Uber Eats, neither of which publishes sales data for the UK. said on Friday that 90.2% of Just Eat shareholders have tendered shares to its takeover offer, and that the company will begin a squeeze-out process to acquire the rest.

It now expects Just Eat-Takeaway shares to begin trading on Feb. 3. The first deadline for comments on the CMA inquiry is however not until Feb. 6.

Analyst Neil Wilson of said the CMA probe decision was hard to understand. On the one hand “I cannot see how this deal won’t be approved,” he said, noting that European regulators have already approved it.

However “the worry among shareholders is that if the CMA has taken the big step to do this now, it means business, otherwise it would have let it go.” ($1 = 0.7608 pounds)

(Reporting by Toby Sterling; Editing by Jan Harvey and Keith Weir)