Just Eats and Takeaway are set to merge, forming one of the world’s largest food delivery platforms

Just Eats and Takeaway are set to merge, forming one of the world’s largest food delivery platforms

Two of Europe’s top food delivery services announced that a merger is already well underway this week. Just Eat and Takeaway.com said they are in the “advanced stages” of merging their companies, each of which has a market cap around $5 billion. Together, as one of the world’s largest food delivery companies, they’ll be able to better compete against giants like Uber Eats and Amazon-backed Deliveroo, according to Tech Crunch

Together, the two companies process 360 million food orders annually, worth a total of €7.3bn (£6.6bn), according to BBC News. They say the merger would make the company the largest food courier platform in the world. 

Just Eat is based in London, and is considered to lead the delivery market in the UK, while Takeaway.com is based in Amsterdam. In March, Just Eat said a fifth of the UK’s adult population had ordered food through its platform. And the UK is only one of 13 countries where the service operates. 

Since the deal was first announced on Monday, Just Eat shares surged nearly 25 percent to reach £791, considerably higher than Takeaway.com’s £731 offer for each share. This suggests that investors expect a higher bid, either by Takeaway or from another company. Equities analyst Giles Thorne told BBC that even Amazon could be interested in the company, after trying to buy a stake in Deliveroo before the UK’s competition watchdog stopped the deal to investigate. A counterbid from Uber Eats or Deliveroo could raise similar competition issues. 

“These businesses are driving – and will continue to drive – a generational shift in the way humans buy their food,” Thorne said

Expansion is key to establish the economies of scale that benefit delivery and transportation companies. It allows for more efficient route planning, with more drivers regularly available close to a variety of pick-up and drop-off points. Since timing is crucial for food delivery, this becomes even more important. 

According to UK merger rules, the companies now have until August 24thto get final approval on the deal from investors. The boards have already agreed on terms for the deal, with Just Eat chairman Mike Evans and Takeaway.com chief executive Jitse Groen both serving in their prior roles at the new, larger company. The new company would have its headquarters in Amsterdam, with a “significant part of its operations” remaining in the UK. 

Photo by jamesoladujoye from Pixabay