🛵 Mega Merger Proposal
JPMorgan analysts, including Marcus Diebel, proposed a massive merger of Just Eat Takeaway.com NV, Delivery Hero SE, and iFood, suggesting it could create a powerhouse in the food delivery market called JustiFoodHero. Prosus NV, which already has a stake in Delivery Hero, was named as the potential orchestrator of the deal. They believe the management change at Prosus could spark such a merger, noting that Prosus has the financial resources for significant M&A activity. Delivery Hero has a market cap of €6.9B ($7.5B), and Just Eat is valued at €2.9B ($3.2B).
😂 Just Eat CEO’s Lighthearted Response
Just Eat CEO Jitse Groen reacted with humor to the merger proposal. He posted on X, "I think we would have to work on the name," with a laughing emoji, and tagged Delivery Hero CEO Niklas Oestberg. This response shows that while the merger might be a significant business move, it’s not without its quirks. Just Eat’s stock remained largely unaffected by the news.
🍽 A History of Consolidation
The food delivery industry has seen extensive consolidation in recent years. Just Eat Plc merged with Takeaway.com NV in 2020 in a deal worth about $7B. Prosus had attempted to disrupt this merger with a bid for Just Eat, but the offer was rejected by shareholders. Since then, Just Eat has continued to streamline its operations, selling its 33% stake in iFood to Prosus in 2022 and considering selling its US unit, Grubhub.
💼 M&A in the Food Delivery Sector
Analysts from JPMorgan see a mega-merger as just one of several M&A options in the European food delivery market. Uber's purchase of Delivery Hero's Taiwan operations for $950M in May 2024 is a recent example of ongoing consolidation. As companies continue to merge and acquire, the landscape of the food delivery market is expected to keep evolving, with larger firms dominating the industry. However, both Just Eat and JPMorgan have declined to comment further on this merger idea.
Is a mega-merger in the food delivery sector inevitable?
