Just Eat's proposed £200m acquisition of Hungryhouse has been provisionally cleared by the Competition and Markets Authority (CMA).
It ruled that the deal did not raise competition concerns and would not result in increased prices, despite initial fears that the tie up could result in worse terms for restaurants.
A CMA panel found that Hungryhouse currently provided limited competition to Just Eat since it is much smaller in size and offers far less unique restaurants. It said that the likes of Deliveroo, UberEATS and Amazon, presented a far greater competitive challenge to Just Eat.
Inquiry chair Martin Cave 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, which was founded in Denmark in 2001, announced it was acquiring Hungryhouse in December last year. The company also announced the acquisition of Canadian firm Skipthedishes for £66m, which features 2,900 restaurants, to expand its operations in the country.
Just Eat said that the Hungryhouse integration would be generate additional EBITDA of £12-15m, excluding integration costs of £1m.
The CMA is now asking for views on these provisional findings.
Just Eat gobbles up Hungryhouse for £200m >>
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