The UK’s Competition Markets and Authority (CMA) has at last approved Amazon’s 16 percent minority stake in food delivery service Deliveroo. The CMA’s findings, released today, note that the proposed Amazon-Deliveroo deal “has not resulted, and may not be expected to result, in a substantial lessening of competition (SLC) within a market or markets in the United Kingdom (UK) for goods and services.”
That concern — that Amazon’s investment in Deliveroo would lessen competition and consumer choices along with it — has hindered the investment since it was first announced back in May of 2019. For a quick recap, here’s how the saga has played out since then:
- May 2019: Amazon announces its participation as the largest investor in Deliveroo’s $575 million Series G funding round.
- July 2019: The CMA opens an investigation into Amazon’s investment, saying there were “reasonable grounds” that such a deal would mean the two companies would “cease to be distinct.”
- October 2019: The CMA launches a formal probe into the deal.
- April 2020: The deal gets initial approval, with the CMA citing “significant decline in revenues” for Deliveroo thanks to the pandemic.
- June 2020: Regulators grant provisional clearance of the deal.
With this final approval, the CMA did warn Amazon that that increasing equity ownership of Deliveroo could result in further investigation, according to CNBC.
The approval comes at a time when consolidation is rampant among third-party food delivery services worldwide. The CMA finally approved the Takeaway.com’s acquisition of Just Eat, a deal that has created the largest food delivery service outside of China. The newly formed Just Eat Takeaway.com then swooped up Grubhub. Uber Eats, meanwhile, had been looking to buy Grubhub but backed away from such a deal in part because of the regulatory scrutiny the move would raise. Instead, it acquired Postmates in July.
With the pandemic still wrecking much havoc on the restaurant industry, we will probably see more of this consolidation — and probably a good deal of scrutiny, too — before the year is out.