Britain’s competition regulator cleared online food delivery company Takeaway.com’s takeover of rival Just Eat, saying the €7bn deal would not reduce competition. Takeaway immediately made a move to raise €400m in cash by issuing shares and convertible bonds.
Amsterdam-based Takeaway.com beat tech investment giant Prosus in a battle to buy Just Eat in January.
Takeaway and Just Eat, operating separately until last week, have each said they saw an initial shock from the coronavirus outbreak, but orders are recovering.
Britain’s Competition and Markets Authority (CMA) investigated the deal to see if Takeaway.com would have been likely to re-enter the UK market without the acquisition, thereby creating competition to Just Eat and the likes of Uber Eats and Deliveroo.
It concluded there was not a material likelihood of that happening if it blocked the deal, and it therefore gave it the green light.
Renamed Just Eat Takeaway.com, Europe’’s largest takeaway delivery service, moved quickly to shore up its finances with an overnight share and convertible bond issue.
Takeaway said on Thursday it had raised €400m, representing a 3.2% dilution of its stock base, from an accelerated overnight offering to institutional investors.
Shares were issued at €87 per share, a 3.7% discount to its closing price.
Takeaway shares, which trade in Amsterdam, traded at €87.98 in the latest session.
The company also issued €300m in convertible bonds.
The money will be used to pay down credit facilities used by both Just Eat and Takeaway and “for general corporate purposes" as well as to provide the company with financial flexibility to act on strategic opportunities.
“In this case, we carefully considered whether Takeaway.com could have re-entered the UK market in future, giving people more choice,” CMA mergers director Colin Raftery said in a statement.
“But after gathering additional evidence which indicates this deal will not reduce competition, it is also the right decision to now clear the merger.”