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Bloomberg
Amazon.com is facing an initial review by the UK competition regulator into its bid to buy a slice of fast-growing food delivery startup Deliveroo.
The Competition and Markets Authority (CMA) said it has “reasonable grounds†to believe that Amazon and Deliveroo have either ceased to be separate businesses, or will merge in the near future, according to the enforcement order posted online.
The initial review means that Amazon won’t be able to close the deal and that both companies will have to continue acting as independent entities. While reviews into mergers by the CMA are relatively common, it is unusual for the regulator to examine acquisitions of minority stakes. Amazon said it would invest in a $575 million funding round in Deliveroo to help
the London-based startup expand its technology team and network and compete against the likes of Just Eat Plc and Uber Technologies Inc in Europe’s fiercely competitive food delivery industry.
“Deliveroo and Amazon have been working closely with regulators to obtain regulatory approvals,†said a Deliveroo spokesman.
The UK food delivery marketplace — Deliveroo’s home market — is arguably one of the most competitive.
Amazon closed down its London-focussed food delivery business last year. Amazon has signalled its growing ambitions in the UK with Prime Now, which offers deliveries to major British cities within two hours. But it faces stiff domestic competition from the likes of Ocado Group, an online grocery pioneer that licenses its technology to the likes of Kroger.