Takeaway food delivery platform Just Eat (JE.) was one of the very few fallers in the FTSE 100 today as its share price dropped 2.2% to 861p, after regulators launched a surprise review of its proposed £6bn all-share merger with Takeaway.com.
The UK Competition and Markets Authority (CMA) said it was investigating whether the merger would be expected to result in a ‘substantial lessening of competition within any market or markets in the United Kingdom for goods or services.’
In the wake of the investigation, Takeaway.com said the revised expected timetable for the merger would be delayed by one week.
The company would be re-named ‘Just Eat Takeaway.com N.V.’ on 31 January and the shares would trade under the ticker ‘JET’ on the main market on the London Stock Exchange, it added.
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Megabuyte analyst Lee Prout said while the news is a surprise, ‘it seems to be a way of the CMA covering its own back for its rationale behind investigating Amazon’s planned investment in Deliveroo with the fear being that the deals would prevent a large new entrant from joining the UK’s delivery market.’
He added, ‘The issue with the market in its current form is that it has turned into a race to the bottom for market share with consolidation increasingly seen as the answer to turnaround losses.
‘If this consolidation is not allowed to happen, then we could instead see a wave of businesses deciding to leave their least lucrative markets.’