UPDATE, August 5, 2019: The boards of Just Eat and Takeaway.com have agreed to the terms of the merger, recommending an all-share combination, according to a press release. The boards of both companies are recommending shareholders unanimously vote in favor of the merger, which is expected to be completed during the fourth quarter. Combined, Just Eat and Takeaway.com's 355 million orders in 2018 were worth more than $8 billion.
- London-based food delivery company Just Eat confirmed that it is in discussions with Dutch company Takeaway.com about a possible merger. Takeaway.com has an Aug. 24 deadline to make a bid, CNN reports.
- The merger could yield an $11 billion valuation.
- The combined companies, which would be named Just Eat Takeaway.com N.V., would become one of the largest food delivery companies in the world with 360 million orders worth about $8.1 billion, according to Just Eat's website.
A merger will create a food delivery juggernaut in an intense European market currently dominated by Uber Eats and Deliveroo. To get an idea of just how tough it is in this market, Amazon Restaurants folded its operations in London in December because it couldn't find competitive footing.
But Amazon hasn't disappeared from the market entirely, leading a $575 million funding round for Deliveroo in May which pushed that company's valuation to $3 billion to $4 billion. Deliveroo claims to be the fastest growing company in Europe. Meanwhile, Uber Eats also continues to expand in Europe, the Middle East and Africa with plans to triple its workforce this year while also expanding its virtual kitchen presence. These moves underscore the competitive landscape in the market that, according to Bloomberg, has led to pricing battles and business model imitations.
A Just Eat and Takeaway.com merger will quickly scale the company into the top player while also providing an advantage from the combination of their resources and strengths. Just Eat, for example, acquired restaurant POS company Practi and Flyt, a software platform that helps restaurants integrate their POS systems with third-party services, diversifying the delivery company's competencies.
Takeaway.com itself is on a roll, increasing orders 50% during the first quarter of this year, according to CNN, and buying rival Delivery Hero's German operations in December.
This deal could breathe new life into Just Eat, which started seeing its share value begin to dwindle about a year ago as rivals Deliveroo and Uber Eats turned up the heat in its biggest market. In December, those issues came to a head when shares were down 26% on the year and activist investor Cat Rock Capital Management began pushing the company to find ways to sell its non-core assets.
The combined companies could also spur additional consolidation in the space, a prediction noted by some analysts as the space continues to grow and mature. Last year's rumors of Uber potentially buying Deliveroo were put to rest when the two companies couldn't agree on a valuation number. Perhaps a Takeaway.com and Just Eat merger will ignite new conversations.