Food delivery firm Just Eat's planned acquisition £200 million of rival Hungryhouse just took a big step forward.
The Competition and Markets Authority (CMA) has been chewing over the merger since May when the approach was first made and initially had concerns about the possibility of both customers and restaurants suffering a worse deal from the tie-up. In comparison, Hungryhouse gives customers the choice from more unique brands.
The independent CMA panel ruled that Hungryhouse provided only limited competition to Just Eat "because it is much smaller in size and offers too few unique restaurants, making it increasingly hard for Hungryhouse to attract and retain consumers". Just Eat shares are now up 4.91 percent on the news at 737.50 (1007GMT).
The CMA also said the development of platforms such as Deliveroo and UberEats, pose a greater competitive challenge to Just Eat than Hungryhouse.
Martin Cave, chairman of the inquiry, said: "We found that Hungryhouse was a weak competitor to Just Eat and so competition is unlikely to be substantially reduced by this merger, especially given the entry and rapid expansion of innovative suppliers in this sector".
The company said a final decision was expected from the CMA next month.
The CMA is seeking views on its provisional findings before making a final decision.
The deadline for responses is on November 2.
Just Eat and Hungryhouse offer online takeaway ordering services which allow restaurants to offer customers the convenience of choosing from a large range of providers in one place.
Just Eat paid £200m for Hungryhouse, which it bought from Delivery Hero, back in December of a year ago.
Competition is more likely to come from companies such as Deliveroo or UberEATS, which are both a similar size brand compared with Just Eat, offering numerous same restaurants.