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Jeff Bezos, founder and CEO of Amazon.
AFP / Getty Images
Amazon's investment in the start-up of the Deliveroo food distribution is threatened by a UK regulator that ordered the duo to suspend the transaction before deciding to pursue the investigation. & Nbsp;
The Autorité de la concurrence et des marches (AMC) issued a first implementing decree on Friday, fearing that the two companies "will no longer be distinct" following a $ 575 million financing round Deliveroo in May, under the leadership of Amazon.
The CMA survey is somewhat unusual given that Amazon is only a minority shareholder in Deliveroo, last valued at $ 2 billion in 2017, year in which he raised $ 482 million.
However, the CMA has stated that it has "reasonable grounds" to believe that the two companies are no longer distinct. He declined to specify what these "reasonable grounds" were, but they are probably based on public information about the operation, as well as on information that she privately received from Amazon and from Deliveroo. & Nbsp;
The AMC also expressed concern that the two companies will merge in the future. Closer cooperation between the two companies could allow Deliveroo customers to place orders via Amazon Alexa or a takeover would give the Seattle-based giant a second try in the food delivery sector after the removal of its rival , Amazon Restaurants, in June.
Founded in 2013 by Will Shu, former Morgan Stanley Banker, and Greg Orlowski, Software Engineer, Deliveroo has grown at a steady pace. The company is now present in 500 cities and towns in 14 countries around the world. It has an army of 60,000 pbadengers to deliver food from 80,000 restaurants to homes and offices.
It's a well-known name in the UK and in several other countries of the world, but it needs investments and deep pockets from companies such as Amazon to continue to grow and compete. with competitors like Uber Eats. & Nbsp;
A spokesperson for Amazon said: "We are confident that this minority investment will allow Deliveroo to expand its services, which will benefit consumers through wider choice and the creation of new jobs, while more and more restaurants will have access to the service. "
However, European regulators are repressing US tech giants with allegedly monopolistic and uncompetitive tactics. For example, the European Commission recently congratulated Google for promoting its own Google Shopping service in its search results, ahead of other retailers. & Nbsp;
Deliveroo co-founder and CEO, Will Shu.
Getty Images
When Amazon announced its intention to invest in Deliveroo, the shares of take-away companies in Europe, such as JustEat, Takeaway.com and Delivery Hero, dropped.
A spokeswoman for the AMC told Forbes that the original executive order was issued to "pausing" the agreement between Amazon and Deliveroo, whether to decide whether or not it should be completed. so-called "Phase 1" investigation. last 40 days. & nbsp;
The fact that the IBE has been published is "a strong indication" that a Phase 1 survey will be conducted, she said. She was unable to say when the CMA will decide whether a Phase 1 investigation is necessary. & Nbsp;
A spokesman for Deliveroo said, "Deliveroo and Amazon are working closely with regulators to obtain regulatory approvals. There are a number of large companies in the food distribution sector in restaurants and this investment will allow Deliveroo to grow, innovate and, in our view, enhance competition. This investment will help create jobs, help restaurants grow their businesses and improve consumer choice. "
If Deliveroo failed to raise the funds from Amazon and if, as a result, the company ceased operations, then it could be argued that the consequences would be worse for consumers.
Jonathan Branton, Head of European Competition at DWF, said: "Surveys of acquisitions of minority stakes are certainly less common than for conventional acquisitions, but that does not mean that they do not happen."
"For the moment, it is only the beginning of an investigation whose outcome we do not know yet. While it may not be immediately obvious that the parties are considered close competitors, the CMA's decision to open an investigation means that it has reason to believe that a potential competition in one market or another deserves further investigation. "
In the end, if the chord was blocked, Deliveroo would have to go back to the drawing board. Erin Platts, head of Silicon Valley Bank for the EMEA region, told Forbes that Deliveroo would not have too much trouble finding other investors if the CMA prevented it from occurring. 39, accept the money from Amazon.
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Jeff Bezos, founder and CEO of Amazon.
AFP / Getty Images
Amazon's investment in the start-up of the Deliveroo food distribution is threatened by a UK regulator that ordered the duo to suspend the transaction before deciding to pursue the investigation.
The Competition and Markets Authority (AMC) on Friday issued a first application order, fearing that the two companies will "stop being separate" as a result of funding $ 575 million made in Deliveroo in May under the leadership of Amazon.
The CMA survey is somewhat unusual given that Amazon is only a minority shareholder in Deliveroo, last valued at $ 2 billion in 2017, year in which he raised $ 482 million.
However, the CMA has stated that it has "reasonable grounds" to believe that the two companies are no longer distinct. He declined to say what these "reasonable grounds" are, but they are probably based on public information about the deal, as well as information he privately received from Amazon and Deliveroo.
The AMC also expressed concern that the two companies will merge in the future. Closer cooperation between the two companies could allow Deliveroo customers to place orders via Amazon Alexa or a takeover would give the Seattle-based giant a second try in the food delivery sector after the removal of its rival , Amazon Restaurants, in June.
Founded in 2013 by Will Shu, former Morgan Stanley Banker, and Greg Orlowski, Software Engineer, Deliveroo has grown at a steady pace. The company is now present in 500 cities and towns in 14 countries around the world. It has an army of 60,000 pbadengers to deliver food from 80,000 restaurants to homes and offices.
It's a well-known name in the UK and in several other countries of the world, but it needs investments and deep pockets from companies such as Amazon to continue to grow and compete. with competitors like Uber Eats.
A spokesperson for Amazon said: "We are confident that this minority investment will allow Deliveroo to expand its services, which will benefit consumers through wider choice and the creation of new jobs, while more and more restaurants will have access to the service. "
However, European regulators are repressing US tech giants with allegedly monopolistic and uncompetitive tactics. For example, the European Commission recently congratulated Google for promoting its own Google Shopping service in search results, ahead of other retailers.
Deliveroo co-founder and CEO, Will Shu.
Getty Images
When Amazon announced its intention to invest in Deliveroo, the shares of take-away companies in Europe, such as JustEat, Takeaway.com and Delivery Hero, dropped.
A spokeswoman for the AMC told Forbes that the original executive order was issued to "pausing" the agreement between Amazon and Deliveroo, whether to decide whether or not it should be completed. so-called "Phase 1" investigation. last 40 days.
The fact that the IBE has been published is "a strong indication" that a Phase 1 survey will be conducted, she said. She was unable to say when the CMA will decide whether a Phase 1 investigation is necessary.
A spokesman for Deliveroo said, "Deliveroo and Amazon are working closely with regulators to obtain regulatory approvals. There are a number of large companies in the food distribution sector in restaurants and this investment will allow Deliveroo to grow, innovate and, in our view, enhance competition. This investment will help create jobs, help restaurants grow their businesses and improve consumer choice. "
If Deliveroo failed to raise the funds from Amazon and if, as a result, the company ceased operations, then it could be argued that the consequences would be worse for consumers.
Jonathan Branton, Head of European Competition at DWF, said: "Surveys of acquisitions of minority stakes are certainly less common than for conventional acquisitions, but that does not mean that they do not happen."
"For the moment, it is only the beginning of an investigation whose outcome we do not know yet. While it may not be immediately obvious that the parties are considered close competitors, the CMA's decision to open an investigation means that it has reason to believe that a potential competition in one market or another deserves further investigation. "
In the end, if the chord was blocked, Deliveroo would have to go back to the drawing board. Erin Platts, head of Silicon Valley Bank for the EMEA region, told Forbes that Deliveroo would not have too much trouble finding other investors if the CMA prevented it from occurring. 39, accept the money from Amazon.
