Just Eat (LON:JE) shares climbed over 5 percent on Thursday, after the competition authority gave their provisional approval for the merger between Just Eat and Hungry House.
Just Eat bought Hungry House for £200 million back in May, before the Competition and Markets Authority launched a probe after concerns grew that companies signing up to the sites would not have enough leeway to negotiate rights.
However, the CMA announced on Thursday that Hungryhouse was too small to offer major competition to its larger rival, and combined with the rise of services such as Deliveroo and UberEats, said the takeover “is unlikely to result in competition concerns”.
Martin Cave, inquiry chair, said:
“We carefully assessed competition in this rapidly evolving industry to make sure this merger would not result in increased prices or reduced quality of offering for either restaurants or their customers.
“We found that Hungryhouse was a weak competitor to Just Eat and so competition is unlikely to be substantially reduced by this merger, especially given the entry and rapid expansion of innovative suppliers in this sector.”
The final decision is expected from the CMA next month. Just Eat shares are currently up 4.91 percent on the news at 737.50 (1007GMT).