One of the largest food delivery companies in the world would be created following the merger of Just Eat and its Dutch rival Takeaway.com. the former has agreed in principle to of the combination according to the companies.
After the merger, the total value of the two companies together would be about £8.2 billion and would also have a combined businesses that would go into 360 million annual orders and generating revenue of €7.3 billion
According to analysts, Just Eat currently possess a dominant position in t UK food delivery market even though it is also currently facing stiff competition from rivals Deliveroo and Uber Eats.
Founded by a group of five Danish entrepreneurs in 2000, Just Eat was launched in the market the next year. Currently, the company has total staff strength of 3,600 globally.
In addition to operating in Europe under the brand name of Just Eat, the company also has operations in Canada under the brand name Skip The Dishes, in Mexico as iFood and Brazil, and in Australia and New Zealand under the brand name of Menulog.
The shares of the company at the FTSE 100 stock exchange in London opened up almost 25% on Monday after the news of the merger.
Just over half of the combined group would be owed by Just Eat shareholders if the deal goes ahead, while the shareholders of Takeaway.com will own 47.8 per cent of the new entity.
The new entity would have as its chairman the current chairman of Just Eat, Mike Evans. On the other hand, the chief executive of the new entity would be the current CEO of Takeway.com, Jitse Groen. The new entity will have its headquarters in Amsterdam.
The deal between the companies is so designed to show that Takeaway.com is acquiring Just Eat and the deadline for the Dutch company to make a firm offer is 24 August. There was pressure on Just Eat earlier this year by a shareholder to merge the company with a rival. Pressure for a merger on Just Eat with Takeaway.com was being made by activist shareholder Cat Rock that owns 1.7 per cent of the company. Cat Rock is also a shareholder of Takeaway.com.
A £575 million investment in rival Deliveroo was announced by Amazon in May this year which impacted the stocks of Just Eat. That investment has however been temporarily blocked by the competition watchdog until completion of an inquiry.
While about one fifth of the adult population in the UK used the services of Just eat, the company had claimed in May this year, it was also experiencing rapid growth for its Skip The Dishes brand in Canada following the company introducing a bilingual version of its service. Four million new customers joined the business last year, said Peter Duffy, the interim chief executive of the company.
Notwithstanding the good performance of the company in the markets it operates in, US fund manager Cat Rock said it “believed that a merger with a well-run industry peer is a very attractive avenue for securing world-class leadership, delivery expertise, and a premium”.
(Adapted form BBC.com)