Thursday 12 October 2017 12:17 pm

Just Eat's Hungryhouse takeover is nearly good to go as competition watchdog gives provisional clearance

The competition watchdog has provisionally paved the way for Just Eat to gobble up Hungryhouse, saying the merger does not raise concerns.

Shares in Just Eat rose nearly five per cent in morning trading as investors chewed over the good news.

Just Eat paid £200m for Hungryhouse, which it bought from Delivery Hero, back in December of last year.

In May, the Competition and Markets Authority (CMA) referred the deal between the online takeaway firms for an in-depth merger investigation, on concerns that the merger could lead to worse terms for restaurants than if they had a choice of either company.

Read more: Just Eat's merger with Hungryhouse could be off the table with full probe

The CMA said today that a group of independent panel members had come to the conclusion that, on balance, it is unlikely to result in competition concerns.

At the moment, Hungryhouse provides limited competition to Just Eat because it is considerably smaller in size and offers too few unique restaurants, which the watchdog said made it increasingly difficult for Hungryhouse to attract and retain consumers.

The CMA also said the development of platforms such as Deliveroo and UberEats pose a greater competitive challenge to Just Eat than Hungryhouse.

Martin Cave, inquiry chair, said: "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."

Just Eat said it welcomed the announcement and looked forward to "continuing to deploy our technology and expertise to help more independent restaurants develop and grow their businesses".

The company said a final decision was expected from the CMA next month.

Read more: Just Eat snaps up rivals Hungryhouse and SkipTheDishes