The Competition and Markets Authority have announced that they will enter phase two of their investigation into Just Eat’s (LON:JE) proposed £200m merger with Hungryhouse.
Just Eat proposed plans to acquire Hungry House in December for £200 million, however, there were doubts from the competition watchdog that restaurants using the merged delivery service could end up with a worse deal.
The Competition and Markets Authority (CMA) have Just Eat the chance to address concerns earlier this month, but the group failed to do so.
“Following its initial investigation into the merger, the CMA has found that the companies are close competitors because of the similarity of their service and their broad geographical coverage,” the CMA said.
It has been argued that the combined group would not have too much control over the market because the competition had been bolstered by a series of new entrants such as UberEATS and Deliveroo.
However, phase one of the investigation found that such other food delivery services were less direct competition because they targeted different restaurants in fewer locations. Services such as Deliveroo tends to be more high-end, working with more expensive branded restaurants in bigger cities.
Last week said Just Eat said it “looks forward to co-operating with the CMA and is committed to demonstrating to the CMA that the market is, and will remain, competitive following completion of the proposed transaction”
Just Eat first started in Denmark in 2001 but it is now based in London. As well the Hungryhouse deal, Just Eat plan to expand further by hoping to expand in Canada by taking over SkipTheDishes there for 110 million Canadian dollars (£66.1 million)
Paul Harrison, who became chief financial officer in September, took over as interim chief executive. He said that the company’s strategy and rapid growth will be unaffected by the various management changes.