Dutch takeout giant Takeaway.com is in talks to buy London’s Just Eat and create a £9 billion ($11.1 billion) online food ordering business that is expected to be more competitive to younger rivals Uber Eats and Deliveroo.
“The possible combination may be implemented by way of an offer for Just Eat by Takeaway.com,” Just Eat said in a statement on Saturday (July 27). There is “no certainty” that any transaction will happen.
The proposed takeover could create a powerful online food delivery group across Europe. It’s also is a triumph for hedge fund investor Cat Rock Capital, who is invested in both companies and has asked for a deal, the Financial Times reported. Takeaway.com has until Aug. 24 to announce a firm intention to seal the deal.
Cat Rock said in part that “a merger with a well-run industry peer is a very attractive avenue for securing world-class leadership, delivery expertise, and a premium.”
Just Eat is focused on the markets in the U.K. and western Europe and recently considered expanding into Canada, Latin America and Australia. Takeaway.com holds a dominant position in Germany and eastern Europe.
Takeaway.com and Just Eat have been overshadowed by Amazon-backed Deliveroo and Uber Eats, in that the two latter go a step further by providing their own in-house delivery networks.
As the online food delivery service market is heating up and becoming more crowded, some of the largest operators of restaurants are renegotiating with the firms that bring takeout to consumers. While restaurants were once fast to sign up for delivery services, they are now seeking lower rates as competition in the space is increasing.
Just Eat recently started shrinking its workforce in July to get rid of redundancies. The layoff news followed its acquisition of City Pantry earlier this month, which wasn’t long after it acquired restaurant tech companies Flyt and Practi.