M&A

Takeway.com Delivers $10B Deal to Buy Just Eat

The merger could spark further consolidation in a crowded business where large firms such as Uber Eats compete with a host of smaller companies.
Matthew HellerJuly 30, 2019
Takeway.com Delivers $10B Deal to Buy Just Eat

Netherlands-based Takeaway.com has agreed to acquire Just Eat in a $10.1 billion deal that could spur further consolidation in the crowded online food delivery business.

The combined company would be the world’s largest online food delivery firm outside China, with orders worth $8.1 billion based on 2018 value, versus Uber Eats’ $7.9 billion.

Takeaway.com, which considers itself the “leading online food delivery marketplace in Continental Europe,” is particularly strong in the Netherlands and Germany, while Just Eat’s biggest markets by sales are the U.K. and other countries in Western Europe.

Investors in London-listed Just Eat will receive 0.09744 Takeaway.com shares for each share, implying a value of 731 pence per Just Eat share, a 15% premium to the closing price on Friday.

“The possible combination would create one of the largest online food delivery companies in the world, with scale, strategic vision, industry leading capabilities, leading positions in attractive markets and a diversified geographic presence,” the companies said in a joint news release.

According to Quartz, “consolidation is overdue in the hyper-crowded food delivery space…. There are the big names — like Uber Eats, DoorDash, and Postmates in the U.S — plus a host of smaller companies vying for a piece of the market.”

“The trouble is that many of these companies, flush with venture capital and bent on expansion, don’t make any money,” Quartz added. “Food delivery is a tough business, as restaurants have famously thin margins, meaning there often isn’t much left for a third-party delivery company to take a cut from.”

Takeway itself has said online food ordering will be highly profitable for just one player in each country. The company bought the German activities of Delivery Hero for 930 million euros earlier this year.

The opportunity from its acquisition of Just Eat “revolves around leveraging technology spend and administrative costs, in our view, and the sharing of best practice,” Investec analyts said.

BBC News suggested that Just Eat shareholders are expecting a higher bid, noting that the stock has soared by almost 25% to hit 791p since the Takeaway deal was announced on Monday.

Miguel Candela/SOPA Images/LightRocket via Getty Images

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