Just Eat shares fall as CMA probes Takeaway.com merger
Shares in Just Eat fell three per cent this morning after the UK’s competition regulator launched a last-minute investigation into the proposed merger between delivery giants Just Eat and Takeaway.com.
Takeaway.com said that it would revise its timetable by one week, meaning that unless the Competition and Markets Authority (CMA) barred the move, shares in the newly established Just Eat Takeway.com will begin trading on the 3 February.
It also said that over 90 per cent of its shareholders had approved the merger.
The CMA last night said it intended to “open an investigation into the transaction”, in a move that could jeopardize a long-awaited deal that was just days before the finish line.
The first phase of the investigation will last from today until 6 February.
In a statement on the London Stock Exchange, Takeaway confirmed that the regulator would be “unexpectedly” looking into whether the Netherlands-based firm would have re-entered the UK market without the current deal in place.
Neil Wilson, chief markets analyst at markets.com, said: “Shares may reflect some tail risk in this deal running into trouble – ultimately though it is hard to see why the CMA – however fickle it has been in the past – would not let this deal go through.
“It strikes me as a little bit last-minute.com and not likely to stop the merge.”
Takeaway removed itself from the loss-making UK market in 2016 after hemorrhaging £768,000 that year alone in the face of stiff competition from companies such as Uber Eats and Deliveroo.
It has since zoomed up the ranks and become one of Europe’s largest delivery firms, processing 71m orders out of 11 countries last year. In its latest half-year results, Takewaway’s gross revenue climbed 68 per cent to €185m (£155.8m).
Earlier this month, Takeaway beat rival bidder Prosus to clinch the merger with Just Eat, the UK’s leading food delivery service, after months of counter-bids. The all-stock deal is currently valued at £6.2bn.
Responding to announcements of the CMA investigation, Takeaway said that it “did not have the intention to re-enter the UK market absent the transaction with Just Eat.” It added that it would fully cooperate with the CMA, and that it was confident of delivering the deal.
The two companies are expected to be slapped with an “enforcement order,” which would prevent the merger getting the green light whilst the investigation is under way.
The probe comes after the UK regulator launched an in-depth investigation into Amazon’s planned stake in Deliveroo last month, over similar concerns that it would prevent new delivery companies from entering the scene.
Earlier this week, Uber announced it was selling the Indian arm of its delivery business to Zomato.
Main image: Getty