This article has been updated with a statement from Prosus.
Prosus is offering to sell down its stake in food delivery platform Delivery Hero (ETR: DHER) to single digits in hopes of avoiding an in-depth European Commission investigation into its proposed acquisition of Just Eat Takeaway.com (AMS: TKWY), sources familiar with the matter told The Capitol Forum.
The investment firm was facing a phase 2 review if it didn’t submit remedies by the end of today, after EU officials last week laid out their concerns that the company’s existing 28% stake in Delivery Hero could let it limit competition after it acquired Just Eat.
The EC will now extend its phase 1 investigation by 10 working days to consider the remedy package. It could deem the offer sufficient to mitigate its concerns and approve the transaction, or it could decide that Prosus needs to further reduce its stake in Delivery Hero. If the latter, it’ll open an in-depth review.
It’s unclear to what exact percentage Prosus has offered to reduce its stake – and that’ll be the deciding factor for the EC.
During last week’s state-of-play meeting, the authority is said to have held a tough line and told Prosus to either substantially or fully divest the Delivery Hero stake, or face an in-depth probe.
Prosus higher-ups spent all week discussing whether to submit remedies and how they should look, sources said, with both a behavioral and a structural package on the table. Discussions went until the last minute on today’s remedy deadline.
The companies’ merger agreement gives Prosus until December 2 to get all necessary regulatory approvals, which does give time for a phase 2 review. But the firm is under pressure to complete the deal and implement changes it claims will turn Just Eat into a “European tech champion” now that U.S. food delivery giant DoorDash is acquiring European counterpart Deliveroo.
In a statement, Prosus said, “Following constructive conversations with the European Commission, we have submitted remedies that directly and comprehensively address the concerns expressed in their preliminary assessment, with a view to obtaining a Phase 1 approval.
“We are confident in our path to completing the transaction. Innovation doesn’t wait, and the food delivery and AI sectors are being rapidly reshaped…
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