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Just Eat-Hungryhouse Merger is Being Investigated by the CMA

The merger between food delivery company Just East and rival platform Hungryhouse is under an “in-depth” investigation from pro-competition authorities.

London-based Just Eat announced its intention to acquire the smaller company—owned by German firm Delivery Hero—in December 2016 for £200 million, plus £40 millions depending on performance targets.

The UK’s Competition and Markets Authority (CMA) —a governmental office in charge of ensuring competition among businesses—has released a statement saying that it kick-started an investigation on the merger due to the fact “that the companies [Just Eat and Hungryhouse] are close competitors because of the similarities of their service and their broad geographical coverage.”

It added that a possible loss of competition resulting from the merger is even more probable as other UK-based food delivery platform such as Deliveroo or UberEATS target different kind of restaurants and are less widespread geographically.

“The CMA is therefore concerned that the loss of competition resulting from the Just Eat/Hungryhouse merger may result in worse terms for restaurants using either of the two companies.”

The investigation will now proceed to an in-depth “phase two”, overseen by an independent panel.

JustEat commented the announcement in a statement: “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. In the meantime, Just Eat will continue to operate its business as usual.”

Image via bit.ly/2q5Coi8

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