Money

Just Eat in £9bn merger with Takeaway.com to create global food delivery giant



Just Eat has announced plans for a £9bn merger with Takeaway.com to create one of the world’s largest food delivery firms.

The two companies said they have reached an agreement in principle and are at “advanced stages” of merger talks which value Just Eat at £5bn, a 15 per cent premium on its closing share price on Friday. The shares surged 24 per cent on Monday to 789p. 

Just Eat and Amsterdam-based Takeaway.com face tough competition from rivals with deep pockets such as Uber Eats and Deliveroo, which is backed by Amazon. 

The proposed transaction would create a company boasting a combined 360 million orders last year.

The combined company will be listed on the London Stock Exchange and maintain a “significant” operation in the UK but be headquartered in Amsterdam.

Helal Miah, investment research analyst at The Share Centre, said: “Just Eat and Takeaway.com have complementary portfolios where they don’t currently compete with each other geographically, and the merger indicates the need for consolidation in an industry where economies of scale are all-important.”

Just Eat is the largest food delivery company in the UK but analysts have criticised its management’s failure to capitalise on its early dominance of the rapidly growing sector, allowing nimbler rivals like Deliveroo to gain ground.

Giles Thorene and Sebastian Patulea, analysts at Jefferies, said Just Eat has not invested heavily enough.

The deal with Takeaway.com demonstrates that the companies recognise that “if any of the European operators are going to outgun Uber, then size does matter”, Jefferies said in a note.

Jefferies predicted that Japan’s SoftBank, Amazon or a private equity firm could also come in with a counter-offer. 

The proposed deal is the latest move towards consolidation among online food delivery services.  

Just Eat bought its UK competitor HungryHouse in 2018 and last December Takeaway.com snapped up Delivery Hero’s German business.

Uber Eats discussed a takeover of Deliveroo earlier this year but the two sides walked away from any tie-up.



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.