Just Eat PLC’s (LON:JE.) planned £200mln acquisition of rival Hungryhouse has been given the provisional green light by competition regulators.
Shares in Just Eat jumped 4.9% in morning trading to 737.5p following the news.
The Competition and Markets Authority said the takeover, which it had been probing since May, would not restrict competition and lead to a worse deal for consumers or restaurants.
READ: Just eat snaps up rivals SkipTheDishes and Hungryhouse
The watchdog found that the likes of Deliveroo and UberEATS presented a “greater competitive challenge” to Just Eat than Hungryhouse, which it called a “weak competitor”.
Deliveroo’s own projections would seem to back that up, with the group expecting to have increased its share of the food delivery market from 5-10 % to between 10-20% by the end of this year.
"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,” said inquiry chair Martin Cave.
Final decision might come as soon as year end
“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 CMA said it will now listen to responses to the provisional findings before making a final decision.
Some analysts have said this morning that they now expect the deal to go through before the end of the year.
The decision will come as a relief for Just Eat’s new chief executive Peter Plumb, who only joined the company a few weeks ago from Moneysuperket.com Group PLC (LON:MONY).