Just Eat and Hungry House - Takeover Cleared

The proposed £200m takeover of Hungry House by Just Eat looks like it can proceed after the deal was given provisional clearance by the Competition and Markets Authority.

You can read about the CMA clearance in this article.

The overall conclusion about the deal was as follows:

"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 obtained evidence from all the major industry participants and carried out surveys, with the public and restaurants, to understand how the merger could impact both types of 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 detailed report from the CMA is also worth a download if you are interested in how the CMA explores the potential competition issues raised by a proposed takeover or merger.

There is also some interesting market size data in the report (though most of the financial data on the two companies is redacted).

For example, analysts UBS estimate that the market size of the restaurant delivery segment in 2016 was £5.8bn and expect this to rise to £6.7bn in 2020.

UBS estimate that of the £5.8bn market, some £2.7bn is currently ordered online.