Just Eat Takeaway Rules Out Mergers With Money-Losing Rivals

Just months after closing its $7.3 billion acquisition of Grubhub, food delivery giant Just Eat Takeaway said on Tuesday (Aug. 17) that it’s not interested in partnering with struggling industry competitors to boost its bottom line.

Speaking to analysts and investors during an earnings call, Just Eat Takeaway CEO Jitse Groen said he is willing to consolidate with similar meal companies, but that it doesn’t “make sense for a leading food delivery business to sell leading businesses” or combine with loss-making rivals. 

Related news: Grubhub Stockholders Approve Acquisition By Just Eat Takeaway

Groen’s remarks came at the heels of investor complaints regarding Takeaway’s plans to invest in logistics and groceries. Cat Rock, which owns about 5 percent of the Netherlands-based food delivery company, criticized its “broken communication” with investors, and has threatened a potential hostile takeover if Groen doesn’t explore a merger with global players such as DoorDash, Delivery Hero or Amazon.

Groen, who created Takeaway in 2000, has been making major moves over the last year, and is focused on cementing Takeaway’s place among the world’s largest meal delivery marketplaces. While the Grubhub acquisition launched the company into the U.S. market, the delivery service acquired Just Eat for $8 billion last year, making its first foray into the U.K. market and adding to its 20-plus subsidiaries in Australia, Canada and Latin America.

The company’s publicly issued financial results for the first six months of 2021 showed significant revenue growth and increased online share gains in markets like the U.K. and Australia, helped by investments in supply expansion, brand awareness and customer experience. Revenue grew by 52 percent to €2.6 billion (about $3 billion), compared with the €1.8 billion generated in the first half of 2020.

The Dutch company reported investing “predominantly in the historically underinvested legacy Just Eat markets,” while spending €142 million in restaurant support initiatives and COVID-19-related commission fee caps that were “unlawful” and “counterproductive,” adding that the company “will join the industry to oppose any extensions” into the second half of the year.

The company also said that it will consider monetizing its 33 percent stake in the Brazilian online food delivery portal iFood, “if an appropriate offer is made that reflects the size and superior growth of this asset.” The €2.3 billion bid received to date is below management expectations.