The London-based Food ordering and delivery platform, JustEat and Netherland-based Takeaway have signed a merger deal originally valued at $10 billion but more currently valued at £6.2 billion ($7.65 billion). Today, the Competition and Markets Authority (CMA) has officially announced its approval and gave a green signal to the merger.
CMA states, “Millions of people in the UK use online food platforms for takeaways and, where a merger could raise competition concerns, we have a duty to rigorously investigate whether customers could lose out. In this case, we carefully considered whether Takeaway.com could have re-entered the UK market in future, giving people more choice. It was important we investigated this properly, but after gathering additional evidence which indicates this deal will not reduce competition, it is also the right decision to now clear the merger.”
At the same time, the merged company announced its €700 million ($756 million) in a new outside funding round which it received in the form of new shares and convertible bonds.
According to both the companies, they will use the new round in order to pay down debts, business development and other corporate purposes and potential acquisitions in what remains a very fragmented and crowded market for food delivery in Europe and elsewhere.
In an announcement the pair said, “The money will be used to partially pay down revolving credit facilities currently utilized by both JustEat and Takeaway, for general corporate purposes as well as to provide the Company with financial flexibility to act on strategic opportunities which may arise.”
During this COVID-19 pandemic situation, the CMA noted that it is trying to be more flexible and efficient to enable more services to people.
CMA includes, “During the COVID-19 outbreak, the CMA is working with businesses where it can to be flexible – for example, by recognizing that there may be delays in providing the information it needs to conduct investigations. However, it is also trying to complete investigations efficiently at this time, wherever possible, to provide businesses with certainty. In this case, the CMA was able to publish its final decision 26 days ahead of the statutory deadline.”