CMA to launch in-depth probe into Just Eat/Hungryhouse merger

The Competition and Markets Authority has referred Just Eat's proposed acquisition of Hungryhouse to an in-depth phase 2 investigation.

Following its initial investigation into the proposed merger, the CMA has found that the companies are close competitors due to the similarity of their service and their broad geographical coverage.

It also reckons that more recent entrants to the market such as Deliveroo, UberEATS and Amazon Restaurants represent less direct competition to the companies as these tend to target different types of restaurant, namely dine-in restaurants without their own delivery services. In addition, they 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."

Just Eat said on Wednesday that it looks forward to cooperating with the CMA and is committed to demonstrating that the market is, and will remain, competitive following completion of the proposed transaction.

The company now has until 17 May to offer proposals to resolve the competition concerns.

At 0840 BST the shares were down 1.1% to 558p.