LONDON: Britain's Just Eat and Takeaway.com of the Netherlands on Monday (Jul 29) unveiled a plan to join forces to create a heavyweight in the rapidly-growing food delivery sector with around US$8 billion in annual sales.
The combination of the two firms would create a delivery platform worth around US$11 billion capable of competing against Britain-based Deliveroo and Uber Eats of the United States with a strong presence in important markets such as Britain, Canada, Germany and the Netherlands.
If the transaction goes ahead, shareholders in Just Eat would own 52.2 per cent of the combined firm which will be based in the Netherlands, while a London stock listing would be maintained.
Shares in FTSE-100 listed Just Eat jumped more than 20 per cent when trading began Monday.
The firms said that by becoming one of the world's largest food delivery platforms, with annual orders of around 360 million last year, they would be able to leverage investments, particularly in technology and marketing.
"The key feature of the combination of Just Eat and Takeaway.com is the limited geographic overlap between the companies," said analyst Russell Pointon at Edison Investment Research.
Joining up could "help improve profitability to invest further behind their less profitable markets and fund the fights for market share in what is likely to be a very competitive market," he added.