In an attempt to compete with rivals like the Amazon-backed Deliveroo and Uber delivery offshoot Uber Eats, Amsterdam’s Takeaway.com and U.K. company Just Eat have merged to create a new company, one which will be the world’s largest outside of China, according to a report by Reuters.
The new company will be called Just Eat Takeaway, and it said it's going to be a leader in the food delivery markets in Canada, U.K., the Netherlands and Germany. Just Eat shareholders will receive 0.09744 new shares from Takeaway.com, for each share they own.
Just Eat was valued at $5.7 billion according to the terms of the deal, and Takeaway.com’s shares dropped around 8 percent since the deal was revealed last week. On Monday, they were trading at 76.70 euros. Bloomberg reported that the two companies agreed on a $6 billion all-stock deal.
“The board believes that this is a compelling offer for Just Eat shareholders which will create a global leader in a dynamic and rapidly growing sector,” Just Eat Chairman Mike Evans said. “Together we will have the scale to address the huge opportunities in the delivery market, as ordering food moves to becoming an everyday convenience.”
The food delivery market is worth $100 billion all around the world, and rivals like Deliveroo and Uber Eats have some of the most name recognition and market share, so the new company wants to place itself in a position where it can compete.
“There is unprecedented competition in this global market, with lots of new parties,” said Takeaway Founder and CEO Jitse Groen, who will lead the merged company. “Bringing these two together means we can pool the profits from both, to allocate capital efficiently to 23 countries.”
After four years, the merger should save $22.2 million for both companies. Around $10 million in savings are expected in the first year of the merger.
The deal is expected to be finalized by the end of 2019. Just Eat Takeaway.com shares are going to be listed in London and Takeaway’s listing in Amsterdam will lapse after a year.