Just Eat Plc’s 200 million-pound ($259 million) acquisition of Hungryhouse has raised concerns it will cause poor service for British restaurants using either delivery service, which has led to an in-depth probe by U.K. regulators.
According to Bloomberg Markets, the Competition and Markets Authority (CMA) announced that the planned merger will be referred to a Phase 2 investigation, with concerns that the two companies are close competitors because of similar services and broad geographical coverage, and a merger could lead to “worse terms” for its restaurant clients.
Just Eat agreed in December to buy Hungryhouse from Delivery Hero Holding GmbH to fend off growing competition from competitors like Deliveroo, Ubereats and Amazon Restaurants. Amazon.com Inc. launched its restaurant-delivery service in London in September, while Uber Technologies Inc. and Deliveroo also operate in the U.K. capital. However, CMA said the three companies represent “less direct competition” as they target dine-in restaurants rather than fast-food outlets.
Just Eat has until May 17 to offer proposals to resolve the competition concerns to avoid the investigation. The company said it was cooperating with the probe.