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JustEat and Hungryhouse merger under investigation

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Just Eat’s acquisition of Hungryhouse is facing an ‘in-depth’ investigation unless the firm is able to address concerns over competition.

Headquartered in London, Just Eat announced its intention to acquire Hungryhouse, a UK-based platform owned by German firm Delivery Hero, in December last year.

At the time, Just Eat said it was looking to buy the rivaling firm for £200m and willing to spend an additional £40m if the company hit its performance targets.

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The Competition and Markets Authority (CMA) – a non-ministerial government department in the United Kingdom responsible for strengthening business competition and preventing and decreasing anti-competitive activities – said in a statement that its initial investigation into the merger had found “that the companies are close competitors because of the similarities of their service and their broad geographical coverage”.

Additionally, the CMA said other firms operating in food delivery space such as Deliveroo, UberEATS and Amazon Restaurants, represented less direct competition to the companies as these typically target different types of restaurants. These firms, the CMA added, also offer less extensive geographic coverage than Just Eat and Hungryhouse.

“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.”

As a result of the CMA’s initial exploration, the merger will now be referred for an in-depth phase two investigation by an independent group of CMA panel members, unless JustEat is able to address the department’s concerns by 17th May.

JustEat said 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.”

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