Takeaway.com’s £6.2bn merger with Just Eat

"Creating one of the world’s largest online food delivery platforms with 360 million orders worth €7.3 billion in 2018" – Takeaway.com

Who?

Acquirer: Takeaway.com N.V.

Founded in 2000, Takeaway.com is the leading online food delivery marketplace in Continental Europe and Israel. The company focuses on connecting consumers and restaurants ( nearly 144,000 of them) via its online platform.

Seller (Target): Just Eat

Just Eat operate a leading global hybrid marketplace for online food delivery and is the UK's market leader. It acts as a secure and easy intermediary between independent takeaway food outlets and consumers.

The Deal

Value: £6.2bn (Just Eat with 57.5% and Takeaway.com with 42.5% of the share capital)

Announced: 27th July 2019 (approved 23rd April 2020)

Financial Advisors to Takeaway.com: BofA Merrill Lynch, Lazard, Gleacher Shacklock

Financial Advisors to Just Eat: Goldman Sachs, UBS, Oakley Advisory

The combined Just Eat Takeaway.com company has recently been listed on the London Stock Exchange and is a constituent of the FTSE 100.

Why?

Strategic Rationale:

(Click here to see M&A Insight’s analysis on this deal)

Outlook?

Great timing for the industry: the closing of restaurants, as a result of the Covid-19 pandemic has enabled the merged entity to substantially increase sales due to a surge in short-term demand for delivery services. While the long-term impact on consumer behaviour is unknown, it is clear that the virus concerns and uncertainty still present has facilitated a strong shift in consumer preference for online food delivery services.

Simultaneously worse and riskier timing for the industry:

As a result of Brexit, “restrictive changes to UK migration policy have the potential to add further burdens to existing skills and capacity shortage within the restaurant, takeaway and delivery industry. This could impact short-term industry performance but perhaps, more importantly, could impact the longer-term growth of our industry.”

– Just Eat Annual Report

Interestingly:

– Just Eat rejected a raised takeover offer from Dutch-based technology group Prosus, noting that it “significantly undervalues” the company and said it continued to back the rival all-share offer from Takeaway.com.

– The deal recently concluded after the CMA gave the green light. The CMA is responsible for strengthening business competition and preventing and reducing anti-competitive activities. The competition watchdog probed into the merger to gauge whether Takeaway would have otherwise re-entered the UK market independently, providing consumers with greater choice and increasing competition. Context: Takeaway.com pulled out of the UK in 2016 due to insufficient growth and proceeded to sell its assets to Just Eat.

– Takeaway.com said they would look to sell Just Eat's 33% stake in Brazil's iFood after closing the deal and return half of the proceeds to shareholders of the combined group. Bloomberg reported in July that rival bidder Prosus, who already owns the majority of iFood, was in talks to buy Just Eat's stake.