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Just Eat and Takeaway.com agree on a merger

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What's going on?

Food delivery giants Takeaway.com and Just Eat finalized details of their lip-smacking merger on Monday with news elsewhere highlighting the importance of getting such deals right.

What does this mean?

Investors had pushed Just Eat to link up with a competitor for some time partly to help it save money as it expanded beyond western Europe and built its own delivery service. Takeaway.com big in eastern Europe was also keen on consolidation, having recently gobbled up a rivals German business for $1 billion.

Following the merger, Just Eats current shareholders will own 52% of the combined company which should save $22 million in annual costs within four years. The two handled over 350 million orders worth $8 billion last year, but theyll hope to grow even stronger together. And that may be necessary: major European rival Deliveroo is bankrolled by Amazon, and Uber Eats is reportedly plotting a major grocery delivery move.

Why should I care?

For markets: A new Gogmagog for British investors.
While the new company will inherit Takeaway.coms Dutch headquarters and CEO (just as well Just Eat had been without one since January), it plans to list publicly traded shares in London. Notably, the size of the combined business likely means itll be included in the FTSE 100 group of the largest British stocks. Investors in popular passive funds that track the performance of this index may therefore soon have exposure to the fortunes of a hungry giant. Fee, fi, fo, fum…


The bigger picture: No deal can be a big deal.

A private equity investor appeared to succeed in its bid to take German media titan Axel Springer off the stock market on Monday, but not all recent deals have had happy endings. Shareholders in German listings site Scout24 rejected a takeover attempt earlier this year, holding out for a higher offer but the company is now facing blistering criticism from some investors over its poor performance and lack of ambition.

Originally posted as part of the Finimize daily email.

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