Home Latest News UK CMA extends hold on Amazon-Deliveroo deal

UK CMA extends hold on Amazon-Deliveroo deal

by Jonathan Adams

Last May, Amazon had announced plans to invest $575 million in Deliveroo

UK’s Competition and Markets Authority (CMA) announced on Wednesday that it would push off a decision on whether to let Amazon buy a minority stake in Deliveroo.

The CMA provisionally cleared the deal in April, noting at the time that Deliveroo faced financial crisis because of the Covid-19 pandemic without Amazon’s promised injection of cash, as much of its business dried up due to the closure of restaurants.

Last May, Amazon announced plans to invest $575 million in Deliveroo as part of a plan to take on Uber Eats and Just Eat Takeaway.

But the deal suddenly stalled in December when the U.K. regulator announced an investigation into whether Amazon’s investment in Deliveroo might have an effect on competition in the food delivery sector – particularly by removing incentives on Amazon’s part to relaunch its restaurant delivery service or take a larger role in the online grocery delivery sector.

In taking this decision, the Inquiry Group had regard to the need to take full account of representations received from the Parties and third parties in response to the provisional findings and to reflect the impact of coronavirus (COVID-19) in its assessment, said Stuart McIntosh, Inquiry Group chair, in a statement posted on the CMA website. “The Inquiry Group considers that completion of its investigation and the publication of its final report will not be possible within the original reference period.

The British competition regulator has set a new deadline of August 6 for a decision on the Deliveroo deal. However, in its statement, the CMA said that it “aims to complete the inquiry as soon as possible and in advance of this date.”

This article is for information purposes only.
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