CMA clears Amazon investment in Deliveroo
The Competition and Markets Authority has provisionally approved Amazon’s 16% investment in food delivery company Deliveroo, saying it's unlikely to lead to a substantial lessening of competition.
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The competition watchdog, which launched an investigation into the deal at the end of last year, had already given provisional clearance in April on the basis that Deliveroo could go bust without it. However, it said on Wednesday that clearance was now being given purely on competition grounds.
"Since its initial provisional findings, the CMA has continued to gather and analyse evidence. A detailed assessment of Deliveroo’s finances shows considerable improvement in its financial position, reflecting, in part, changes which were not foreseeable during the early stages of the pandemic," it said.
"Consequently, the CMA has now provisionally concluded that Deliveroo would no longer be likely to exit the market in the absence of this transaction. Given this, the CMA is instead required to base its provisional decision specifically on the impact of the transaction on competition between the two businesses."
The watchdog conceded that the investment should be cleared as it is not expected to damage competition in either restaurant delivery or online convenience grocery delivery.
A spokesperson for Deliveroo said: "This minority investment is good news for UK customers and restaurants, and for the British economy. As we have argued for the past year, since the beginning of the CMA’s investigation, the minority investment will enable British born, British bred Deliveroo to compete against well-capitalised overseas rivals and continue to innovate for customers, riders and restaurants.
"As the British economy recovers from the damage caused by Covid-19, a stable regulatory environment is critical. We therefore urge the CMA to conclude their review as swiftly as possible."