US$575m Deliveroo investment by Amazon provisionally cleared by competition watchdog
The CMA also revoked an order to keep Just Eat and Takeaway.com separate.
Amazon’s $575 million minority investment in Deliveroo has been provisionally cleared by the Competition and Markets Authority (CMA).
In a statement, the CMA explained that had provisionally cleared the deal “in light of a deterioration in Deliveroo’s financial position as a result of coronavirus (COVID-19),” noting that the pandemic is having “significant serious impact” on the company’s food delivery business.
“The ongoing ‘lockdown’ in the U.K. has resulted in the closure of a large number of the key restaurants available through Deliveroo, and a significant decline in revenues,” the CMA said. “While Deliveroo has sought to expand its supply of convenience groceries during the crisis, these sales are limited and have not made up for losses in its restaurants business.”
The regulator had been investigating the deal, first announced in May 2018, over concerns that it could damage competition by discouraging Amazon from re-entering the online restaurant food market and further developing its presence within the online grocery delivery market.
“As a result, Deliveroo recently informed the CMA that the impact of the coronavirus pandemic on its business meant that it would fail financially and exit the market without the Amazon investment. Deliveroo’s submission was supported by evidence from the company’s financial advisers,” it added.
“The CMA currently considers that the imminent exit of Deliveroo would be worse for competition than allowing the Amazon investment to proceed and has therefore provisionally found that the deal should be cleared.”
The watchdog is now asking for views on these provisional findings by 11 May 2020 and will assess all evidence provided before making a final decision the following month.
Just Eat-Takeaway integration given go-ahead
The CMA also revoked an order to keep Just Eat and Takeaway.com separate, allowing the two firms to go ahead to integrate their businesses.
Takeaway.com bought Just Eat earlier this year following a bidding war with Prosus. However, CMA launched a last minute probe into the merger in January over concerns that it could damage competition.
Almost 3,000 restaurants have signed up with tJust Eat since the lockdown forced outlets across Britain to shut their doors.
