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Europe’s $8 billion food delivery deal delayed as UK launches competition probe

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Via CNBC

A food delivery courier working for Just Eat in London.

Simon Dawson | Bloomberg | Getty Images

Takeaway.com’s £6.2 billion ($8.1 billion) takeover of rival food delivery firm Just Eat has been delayed after the U.K.’s antitrust regulator launched an initial probe into the deal.

The Competition and Markets Authority (CMA) said on Friday that it had opened a review into the merger of the two companies, which will look into whether the deal could result in a “substantial lessening of competition” in the U.K. The CMA says it’s inviting comments on the transaction from interested parties until Feb. 6.

On Thursday, Takeaway.com said it had been informed that the CMA had “reconsidered its position” on the takeover and believed a merger investigation was now warranted. A further statement from the company on Friday said Takeaway.com would now delay its planned all-stock deal by a week as a result of the probe.

The CMA investigation is a blow to the planned combination of Netherlands-based Takeaway.com and U.K.-headquartered Just Eat, two major players in Europe’s fast-growing food delivery industry. Takeaway.com spent months fighting off rival bids for Just Eat from fellow Dutch firm Prosus, the little-known tech investment arm of Naspers.

It arrives just months after the U.K. competition watchdog said it would launch a formal investigation into Amazon’s minority investment in U.K. food delivery start-up Deliveroo. The e-commerce giant led a $575 million funding round for the buzzy online takeout app last year. Deliveroo is one of Britain’s top tech success stories, with a valuation north of $2 billion.

Food delivery has proven a hot sector for investors and one on the brink of significant consolidation. Uber earlier this week announced it would sell its Eats business in India to local operator Zomato, taking a minority stake in the Ant Financial-backed firm. Following the deal, Uber CEO Dara Khosrowshahi said “consolidation has got to happen.”

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Takeaway.com said that over 90% of shareholders in Just Eat had agreed to sell their stake. It said the combined company will be named “Just Eat Takeaway.com NV” on Jan. 31, but that due to its updated timetable shares of the firm now won’t be listed until Feb. 3.

Shares of Takeaway.com and Just Eat fell about 3% and 4% respectively following the announcement of the CMA’s competition probe.


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