Thursday, 12th October, 2017

CMA provisionally clears Just Eat / Hungryhouse merger

The Competition and Markets Authority has provisionally cleared the ordering and delivery companies’ merger with its rival, Hungryhouse.

Back in May the CMA launched a probe into the merger due to concerns that the tie-up (worth up to £240m) could mean that restaurants linked to the service could be forced to accept worse contracts. 

However the CMA have announced; “We provisionally conclude that the anticipated acquisition by Just Eat of Hungryhouse may not be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

The CMA noted that Hungryhouse was in fact too small of a rival to greatly impact the wider market and that rivals such as Deliveroo and Uber Eats “generally present a greater competitive challenge to Just Eat than Hungryhouse, and this is likely to grow as they expand”.

In an announcement today Just Eat said: “Just Eat plc welcomes today’s announcement from the CMA that it has provisionally cleared the company’s acquisition of Hungryhouse.”

“We are pleased that the CMA has provisionally concluded that this transaction does not lessen competition. We look forward to continuing to deploy our technology and expertise to help more independent restaurants develop and grow their businesses, while offering an even better service to consumers.”

“We will continue to work with the CMA ahead of its publication of a final decision, expected in November.”

Fiona Cincotta, a senior market analyst at Citylink says; “10 months after the initial approach, Just Eat has finally got the go ahead for the HungryHouse takeover deal. Just Eat is making profits that so far its peers are struggling to make – in the first half to June 30 pre-tax profits were up 44% as it appears to have cracked the tough code for delivering food at scale.”

“Now this takeover deal looks set to cement Just Eat’s position at the top of the market, as it dominates the online food delivery space.”

“It is clear to see just how elated shareholders are over this deal; the share price has skyrocketed by 6.5% this morning, taking it to an all-time high of 749p.  The share price has been charging higher since it IPO three years ago at 260p. In just three short years the stock price has soared 188%.”