Tuesday 23 June 2020 2:40 pm

Competition watchdog moves closer to green light on Amazon and Deliveroo deal

The Competition and Markets Authority (CMA) is set to make the first step in giving the tie-up between Amazon and Deliveroo the green light.

The announcement, which could be made this afternoon, would reissue a provisional approval of Amazon’s £442m deal to buy a 16 per cent stake in Deliveroo, Sky News reported.

The watchdog is expected to say that as Amazon’s bid to gain a seat on Deliveroo’s board as part of the purchase would not receive superior voting rights, there would not be enough reason to block the deal.

The decision could still be overturned later this year before the deal reaches final approval.

Read more: CMA provisionally clears Amazon’s £442m Deliveroo investment over coronavirus

The CMA first provisionally approved Amazon’s bid in April, stating that the food delivery startup could face collapse due to the impact of coronavirus and that the cash to save it was “realistically only available from Amazon”.

“The CMA currently considers that the imminent exit of Deliveroo would be worse for competition than allowing the Amazon investment to proceed and has therefore provisionally found that the deal should be cleared,” it said at the time.

A source told Sky News that the CMA no longer considers its earlier defence of the deal valid, but would be inclined to approve the deal based on an assessment of competition in the market alone.

Read more: Just Eat slams watchdog’s approval of Amazon’s £442m investment in Deliveroo

Amazon argued that its focus would remain on groceries while Deliveroo would primarily operate as a restaurant delivery service, so a tie-up between the pair would not constitute a new player in either market.

A Deliveroo spokesperson and the CMA declined to comment.

Amazon did not immediately respond to request for comment.