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Just Eat and Takeway.com have agreed on terms of a merger to create a $10 billion food delivery giant. The two former rivals will now collaborate to dominate at least 20 European markets.
Takeaway.com and Just Eat, two online food delivery firms, have confirmed an agreement to form a merger, making it one of the biggest in the global food delivery industry. The agreement will see the London-based Just Eat and Takeaway.com based in Amsterdam form a union worth 8.2 billion pounds ($10.1 billion).
According to the information provided, shareholders of Just Eat will get 0.009744 Takeway.com shares for every Just Eat share they already have. This will result to about 731 pence per share.
The possibility of a merger between the two companies hit the news earlier when Just Eat released an official statement about the possible amalgamation. This, it might be important to note, is happening after a major Just Eat shareholder reportedly pressurized the firm to form the merger. The shareholder purportedly owns up to 1.7% of Just Eat and also owns some part of Takeaway.com.
The new group will have the current Just Eat chairman, Mike Evans, as a chairman; while the founder and current Chief Executive of Takeaway.com, Jitse Groen, will be the CEO. It will be incorporated and domiciled in Amsterdam.
This move would not be the first time Takeaway.com is making a play into the market in the United Kingdom. Back in 2012, the firm began business operations but after struggling for about four years, it sold the UK arm to Just Eat in 2016.
In the tech industry, especially in Europe, the food delivery business is high on the list of the fastest-growing industries. It’s been performing quite impressively. As a result, many large investors are constantly putting in a lot of money to fund many of these firms, as they aim to create as much of a monopoly as they can.
This merger, according to some experts, might be great for Just Eat as it seems to have a lot on its plate, because of rising competition in the sector. Back in May, Amazon announced that it would be investing £575 million in a rival firm, Deliveroo. This, along with competition from Uber Eats, has the potential to reduce Just Eat’s market dominance, making the merger a great move for the firm.
The new merger between both firms means that a new player has been created with operations spanning 20 countries and over 40 million customers. Just Eat is currently listed in London on the FTSE 100 Stock Exchange and on Friday, it went up 2% when the market closed. Also, in 2018, revenue surged by 43% to £779.5 million. This directly represents a £101.7 million gross profit, a significant improvement over 2017 when the firm recorded a £76 million loss.
The firm was founded back in 2000 by combined efforts from five Danish people and was officially launched in 2001. It is present as Skip The Dishes in Canada, iFood in Mexico and Brazil and is also in New Zealand and Australia as Menulog. It currently has a global staff strength of 3,600.