Amazon is set to slash its stake in Deliveroo by nearly five per cent when it launches its upcoming blockbuster initial public offering (IPO).
Amazon will sell around 23.3 million shares in Deliveroo when the company goes public, seeing it reduce its share in the delivery giant from 15.8 per cent to 11.5 per cent, Reuters reported.
Deliveroo announced earlier this week that it is aiming for an ambitious market capitalisation of between £7.6 billion and £8.8 billion, aiming to sell around 128 million shares for between £3.90 and £4.60.
This would see Amazon rake in between £90 million and £107 million while retaining a significant stake in the company.
It comes after the Competition and Markets Authority (CMA) gave its final approval for Amazon to take a 16 per cent stake in Deliveroo last August.
The CMA said that following more than a year of considerations it has finally concluded that the deal would “not result in a substantial lessening of competition in either restaurant delivery or convenience grocery delivery”.
The deal has drawn criticism and controversy across the industry since Amazon led a $575 million funding round for Deliveroo back in May 2019.
However, the CMA has stipulated that any attempts by Amazon to raise its stake in Deliveroo could spark a further investigation.
“When looking at any merger, the CMA’s role is to assess whether consumers will lose out from a substantial lessening of competition,” the CMA’s Stuart McIntosh, who led an inquiry into the tie-up said.
“We have not found this to be the case given the scale of Amazon’s current investment, but if it were to increase its shareholding in Deliveroo, that could trigger a further investigation by the CMA.”