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Daily news and analysis about the food tech revolution

CMA

Takeaway.com and Just Eat’s $7.6B Merger Approved

The U.K,’s Competition Markets and Authority (CMA) has approved Takeaway.com’s £6.2 billion ($7.6 billion USD) takeover of British food delivery service Just Eat. The merged company also announced it had raised €700 million ($756 million) in new outside funding in the form of new shares and convertible bonds.

The deal was originally announced in July of 2019. A bidding war with tech investment firm Prosus followed shortly thereafter, which Takeaway.com won — only to have the CMA open an investigation into the deal to see if it would “result in a substantial lessening of competition” in the U.K. food delivery market. 

Takeaway.com previously operated in the U.K., but exited that market in 2016. The CMA’s investigation concerned whether the Dutch company would have re-entered the U.K. market of its own accord without the Just Eat deal. 

“In this case, we carefully considered whether Takeaway.com could have re-entered the U.K. market in future, giving people more choice,” the CMA’s mergers director Colin Raftery said in a statement. “It was important we investigated this properly, but after gathering additional evidence which indicates this deal will not reduce competition, it is also the right decision to now clear the merger.”

The approval comes just days after the CMA provisionally approved Amazon’s investment in delivery service Deliveroo, which has been under investigation for similar reasons. In the case of this deal, the approval seems more tied to the COVID-19 pandemic than anything else, with the CMA concluding that the virus is having significant enough impact on Deliveroo’s business to endanger the third-party delivery company. 

Coronavirus doesn’t appear to be the driving force behind the Just Eat-Takeaway.com deal, which was never as dangerously on the rocks as Amazon’s anyway. According to CNBC, the new funding will be used to in part pay down debts as well as pursue “strategic opportunities.”

British Authorities Open Investigation Into Just Eat-Takeaway.com Merger

Fresh off the heels of a bidding war for the acquisition of UK-based delivery service Just Eat, Takeaway.com, who also offers on-demand restaurant food delivery, faces a new opponent: British regulators.

The Competition and Markets Authority (CMA) said late last week that it is investigating the proposed Takeaway.com-Just Eat Merger to see whether the deal, worth £6 billion (~$8 million USD), would “result in a substantial lessening of competition” in the UK food delivery market, according to The Associated Press.

Specifically, the CMA is looking into whether Takeaway.com would have re-entered the UK market, which the service left in 2016, without the Just Eat deal.

This isn’t the first time the CMA has brought the hammer down on a major deal between two food delivery companies. In May of 2019, Amazon announced a major investment in Deliveroo, only to have it flagged by the Authority, who said it “presented reasonable grounds” that such a deal would make the two companies “cease to be distinct” from one another. In other words, the deal would undercut competition from other food delivery services in the UK, including Just Eat.

The Amazon-Deliveroo investigation is still ongoing, and at last check the deal was said to be in serious jeopardy.

For Takeaway.com and Just Eat, the situation seems a little less dire, at least for now. Takeaway.com said the deal would still go through but be delayed by one week. Takeaway.com said it was confident that clearance on the merger “will be obtained.”

Takeaway.com first announced its intentions to acquire Just Eat in July 2019 in an all-share deal that would create a new company, Just Eat-Takeaway.com. The company then found itself in the middle of a bidding war with Naspers-backed tech investment firm Prosus, who over the last several months has offered multiple counter bids for Just Eat.

While that bidding war was put to bed recently, it, along with this latest investigation from the CMA, underscores how fiercely competitive the food delivery market is getting, and just how thick in the middle of a consolidation process it is. With demand for off-premises orders set to drive restaurant sales for the next decade and investors applying pressure for these companies to show the third-party delivery model can be profitable, companies across the space are shutting down services, selling their operations, and, at least in the case of the big guys, gobbling up the smaller players. 

For its part, Takeaway.com said it was confident that clearance on the merger “will be obtained.” Now we’ll have to wait and see if that really does mean a simple one-week delay or if the two companies have a longer, more complicated battle on the horizon.

Week in Restaurants: Kitopi Brings Ghost Kitchens Stateside, The Amazon-Deliveroo Deal Is on the Rocks

If you’re currently hiding from your in-laws, stuck at the airport on your way home, or just need a mental break from the holidays, now would be a good time to catch up on all things restaurant tech.

Behold, our the last restaurant tech roundup of 2019, complete with news on ghost kitchens, facial-recognition software, and Amazon’s latest antitrust woes:

Kitopi Kicks Off U.S. Operations With NYC Ghost Kitchen

Dubai-based ghost kitchen provider Kitopi has expanded operations to NYC. The startup, which already operates kitchens in London, Dubai, Abu Dhabi, and other cities around the globe, provides kitchen infrastructure to restaurants wanting to use ghost kitchens to fulfill off-premies orders. The company signed a 10-year lease on a space in Brooklyn and has plans for 10 to 15 kitchens to be housed in the facility. Kitopi also plans to open another location, in Manhattan’s West Village neighborhood, in February 2020, and expand further across the U.S. (no specific locations have been named) later in the year.

The Next Phase of the Amazon-Deliveroo Investigation Begins

Amazon’s investment in UK food delivery startup Deliveroo is now in serious jeopardy after the two companies failed to address the concerns from UK antitrust watchdog the Competition and Markets Authority around how the deal would affect competition. Earlier in December, the CMA cited concerns around how the deal could hurt emerging competition in the food delivery market as well as raise prices and lower quality for consumers. The investigation now enters a second phase that will further delay, if not derail, Amazon’s investment and in the process give competitors like Just Eat and Uber Eats a leg up in the meantime.

PopID Is Launching Its Facial-recognition Platform In Dairi-O Kiosks

North Carolina QSR chain Dairi-O, may be older than McDonald’s and far less known, but it’s on the cutting edge as far as implementing restaurant tech is concerned. The chain has teamed up with PopID to launch the latter’s facial-recognition software inside self-service kiosks at Dairi-O restaurants. PopID is owned by Cali Group and already has its technology in place at CaliBurger, Deli Time, and other small-to medium-sized restaurant chains. With the facial-recognition technology, users can access saved favorite meals, re-order, and pay for their food without a phone or credit card. Dairi-O said it plans to install the tech in all of its locations in the first half of 2020, and has expansion plans for the brand itself in the near future.