The Competition and Markets Authority (CMA) has revised its provisional findings relating to Amazon’s investment in Deliveroo, but kept its decision to provisionally clear the deal intact.
The watchdog has in April provisionally cleared the transaction, which gives Amazon 16 per cent stake in Deliveroo, in light of a potentially fatal deterioration in the online food delivery group’s finances as a result of the coronavirus pandemic.
The CMA today said Deliveroo would no longer be likely to exit the market in the absence of the transaction as envisaged earlier.
“The impact of the coronavirus pandemic, while initially extremely challenging, has not been as severe for Deliveroo as was anticipated when we reached our initial provisional findings in April,” Stuart McIntosh, chair of the CMA’s independent inquiry group, said.
However, the agency decided to retain its initial decision to clear the deal as the latest analysis has shown that the deal is not likely to “damage competition in either restaurant delivery or online convenience grocery delivery.”
“Looking closely at the size of the shareholding and how it will affect Amazon’s incentives, as well as the competition that the businesses will continue to face in food delivery and convenience groceries, we’ve found that the investment should not have a negative impact on customers,” McIntosh added.
The CMA added that it would intervene if Amazon raises its stake to take greater control in, or acquires, Deliveroo in future.
Amazon led a $575 million (£460 million) fundraising in Deliveroo in May last year, making what the two parties called “a minority investment” and pitching it against Uber Eats and Takeaway.com in the global race to dominate the market for takeaway meal deliveries.
