UK approves Takeaway's merger with Just Eat

The Netherlands' Takeaway bought Just Eat of the UK in January but the deal was thrown into doubt when the Competition and Markets Authority opened a late-stage investigation.

The CMA suspected Takeaway might have re-entered the UK market, after pulling out in 2016, if it had not bought Just Eat. More competitors might have given consumers greater choice and better value, it said.

The regulator barred the companies from working together or sharing information during its investigation until last week when it lifted the restriction. That move suggested the CMA was moving towards approving the merger.

The CMA said that after inspecting large quantities of the companies' internal documents it had concluded Takeaway was unlikely to try again in the UK without merging with Just Eat.

Colin Raftery, senior director of mergers at the CMA, said: "Millions of people in the UK use online food platforms for takeaways and, where a merger could raise competition concerns, we have a duty to rigorously investigate whether customers could lose out.

"In this case, we carefully considered whether Takeaway.com could have re-entered the UK market in future, giving people more choice. It was important we investigated this properly, but after gathering additional evidence which indicates this deal will not reduce competition, it is also the right decision to now clear the merger."

The CMA approved the takeover of Just Eat shortly after giving the nod to Amazon's investment in Just Eat's rival Deliveroo. Households are turning to delivery services to supply meals during the Covid-19 lockdown.

Earlier in April, Takeaway reported booming orders during its first quarter as food deliveries surged during the Covid-19 crisis. The company said thousands of chains and local restaurants had joined its service in attempts to replace lost dine-in or pickup trade with deliveries.

Separately Takeway said it had raised just over €700m (£613m) from investors to reduce debt and for use on strategic opportunities.

The company placed 4.6m shares with investors to raise €400.2m of equity before transaction costs. The sale represented 3.2% of its share capital and was priced at €87 a share – 3.7% less than the closing price on 22 April. The shares were placed on a non-preemptive basis, meaning they were not offered to existing shareholders first.

Takeaway raised a further €300m by selling convertible bonds due in April 2026. The bonds, which may be converted into shares, have an interest rate of 1.25% payable semi-annually. The new shares will be issued on 27 April and the bonds will be settled on 30 April with trading beginning within 30 days.

The company said: "The net proceeds raised from the capital increase and the convertible bond issuance will be used to partially pay down revolving credit facilities currently utilised by both Just Eat and Takeaway.com, for general corporate purposes as well as to provide the company with financial flexibility to act on strategic opportunities which may arise."