CMA To Officially Investigate Amazon-Deliveroo Deal – BinaryOptions

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CMA Refers Amazon-Deliveroo Deal For Phase 2 Investigation – Quick Facts

(RTTNews) – The Competition and Markets Authority, or CMA, has decided to refer the anticipated acquisition by Amazon of a minority shareholding and certain rights in Roofoods (Deliveroo) for a phase 2 investigation.

The CMA previously found that the deal will result in the creation of a relevant merger situation, which may result in a substantial lessening of competition within a market or markets in the United Kingdom. As the companies did not offer any undertakings to the CMA to resolve the concern, the CMA decided to refer the anticipated acquisition for a phase 2 probe.

Deliveroo is a food delivery service headquartered in London. It operates across 14 markets around the world. In the UK, the company’s main competitors are Uber Eats and Just Eat.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Amazon probed over plan to buy Deliveroo stake

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The UK’s competition watchdog is investigating Amazon’s bid to buy a stake in food delivery firm Deliveroo.

Earlier this month, the Competition and Markets Authority (CMA) gave the two firms a week to address worries that the deal could affect competition.

But, on Friday, the regulator said Amazon had failed to deal with “initial concerns that their investment in Deliveroo could be bad for customers, restaurants and grocers”.

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The review could last up to six months.

The CMA has been looking at the £440m deal since it was announced in May.

However, the regulator said Amazon and Deliveroo had failed to offer any undertakings to address its concerns by a December 18 deadline.

The in-depth investigation threatens to jeopardise Amazon’s attempt to break into the UK food delivery space.

The CMA is worried that Amazon’s plans to invest in Deliveroo could stop it from launching a rival company, which would increase competition and potentially lower prices for consumers.

‘Real risk’

Announcing that it was considering a thorough probe into the deal, the CMA’s executive director, Andrea Gomes da Silva, said: “Millions of people in the UK use online food platforms for takeaways, and more than ever are making use of similar services for the same-day delivery of groceries.

“There are relatively few players in these markets, so we’re concerned that Amazon having this kind of influence over Deliveroo could dampen the emerging competition between the two businesses.”

She said that if the deal were to go ahead in its current form then there was a “real risk” that customers, restaurants and grocers would face higher prices and lower quality services.

In a statement, Amazon said the deal would lead to more innovation and allow Deliveroo to remain competitive.

Meanwhile, Deliveroo said: “We are confident that we will persuade the CMA of the facts that this minority investment will add to competition, helping restaurants to grow their businesses, creating more work for riders, and increasing choice for customers.”

It is not the first time Amazon has tried to enter the food delivery market in the UK.

The online retailer briefly ran its own delivery venture, Amazon Restaurants UK, which it started in 2020 but closed just two years later.

It was previously reported to have made approaches to buy Deliveroo outright. Uber also reportedly had talks with Deliveroo regarding an interest in buying it.

UK competition watchdog investigates Amazon-Deliveroo deal

LONDON (AP) — The U.K. competition watchdog is investigating Amazon’s purchase of a significant stake in food delivery service Deliveroo.

The Competition and Markets Authority decision Friday will put any merger plans on hold. The authority says it has “reasonable grounds for suspecting” that the deal could “result in Amazon and Deliveroo ceasing to be distinct.”

Deliveroo says the investment will “enable Deliveroo to expand, innovate and, we believe, will enhance competition.” Amazon says the expansion will benefit consumers by increasing choice and by “creating new jobs as more restaurants gain access to the service.”

The exact amount spent on the stake is unclear, but Deliveroo’s last fundraising round brought in 450 million pounds ($564 million.)

The CMA could block any deal, as it did recently by halting the attempted merger of Sainsbury’s and Asda.

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