Uber Technologies Inc. and Amazon.com Inc.-backed Deliveroo could soon face tougher competition in the rapidly growing European food delivery market.

Takeaway.com NV, a publicly traded food delivery provider based in the Netherlands, today announced plans to acquire British rival Just Eat Plc. The companies said they’ve reached an agreement in principle and are currently hammering out the final details. Upon the deal’s completion, the combined entity is set to have a market capitalization of around $11 billion.

Just Eat investors will receive 0.09744 Takeaway shares in exchange for each Just Eat share they own. The offer represents a 15% premium to the price at which Just Eat’s stock closed on Friday. According to Bloomberg, the bid is worth $6.2 billion in absolute value.

The combined entity will be one of the biggest food delivery providers not just in Europe but also globally. Together, Takeaway and Just Eat processed 360 million orders worth $8.1 billion last year. Moreover, purchase volume is growing rapidly, with Takeaway having reported a 50% surge in orders during the first quarter of 2019.

The companies said that the merger will provide “greater ability to leverage investments” and capture more market share in regions where they have existing operations. The combined entity should also be in a better position to expand into new markets. In theory, it could attempt to challenge Uber and Amazon on their own turf by moving into the U.S., where neither Takeaway nor Just Eat currently has  a substantial presence.

The new company is set to be headquartered in Amsterdam but will trade on the London Stock Exchange. Takeaway Chief Executive Jitse Groen will remain at the helm, while Just Eat Chief Financial Officer Paul Harrison is coming aboard to lead financial operations after the deal closes.

The merger comes as the other big players in the market also step up their competitive efforts. On Friday, Uber revealed that it’s in talks with major supermarket chains about providing grocery delivery in Europe. Amazon, in turn, is reportedly planning to launch a food delivery service in India, and previously led a sizable investment into Just Eat rival Deliveroo.  

Photo: Takeaway