Just Eat’s planned £200m merger with competitor takeaway firm, Hungryhouse, has been put on hold after concerns emerged that the acquisition could mean poor terms for restaurant operators using the service.
Earlier this month, the Competition and Markets Authority (CMA) said that it would investigate the planned deal because of fears that the loss of competition resulting from the Just Eat/Hungryhouse merger may result in worse terms for restaurants using the firms.
Just Eat was first given the chance to offer ways of addressing these concerns but failed to do so and so the probe will last until November.
Both companies were deemed by the CMA to be close competitors because they provide online takeaway ordering services across similar geographical areas and in similar markets.
These give restaurants the opportunity to reach a wide pool of people, as well as offer customers the convenience of choosing from a large range of takeaway providers in one place.
The CMA also believes that more recent entrants to this market offering delivery services – such as Deliveroo, UberEATS and Amazon Restaurants – represent less direct competition to the companies as these tend to target different types of restaurant (primarily dine-in restaurants without their own delivery services).
As well as spending £200m on the Hungryhouse deal, Just Eat announced in December it was planning to expand in Canada by taking over SkipTheDishes there for 110m Canadian dollars (£66.1m).