Takeaway.com to buy Delivery Hero's German business in EUR930m deal

(Sharecast News) - Dutch online food delivery company Takeaway.com has agreed to buy the German business of Delivery Hero for around €930m in cash and shares.The consideration will comprise €508m in cash and 9.5m shares in Takeaway.com worth €422m.Takeaway's chief executive officer Jitse Groen said the transaction provides the company with a stronger proposition for both consumers and partner restaurants in the German market."It also allows Takeaway.com to operate on a significantly larger scale which is essential in building a profitable online food delivery business. Although the transaction almost doubles Takeaway.com's orders in Germany, there is still ample growth ahead, given that penetration of online food delivery in Germany is amongst the lowest in Europe. We look forward to welcoming Delivery Hero as a shareholder."Takeaway said the deal enables Delivery Hero to strengthen its global footprint, increase its focus on key growth regions and reinforce is leadership positions.Following completion of the transaction, Delivery Hero will have the right to submit a binding nomination for the appointment of one independent member to Takeaway.com's supervisory board. This right will expire until the date Delivery Hero holds less than 9.99% of the company's issued and outstanding share capital.Niklas Oestberg, CEO of Delivery Hero, said: "This transaction delivers a great deal of benefits to the company and makes us better positioned. We will not only achieve but even exceed our revenue targets for 2019, notwithstanding the deconsolidation of the German business. At the same time we will hold a stake in Takeaway.com and have a significantly better cash position - the latter allowing us to reinvest at attractive returns. We are very excited by the huge opportunity that is growing in front of us, and my sincere thanks go to our German teams for creating such outstanding businesses."RBC Capital Markets analyst Sherri Malek said: "This should be taken positively given it positions Takeaway.com as the single dominant player in the German market, increasing its revenue and profit potential."Management believes significant value creation will be driven by scale benefit and cost synergies mainly from marketing, which should exceed €60m by 2020. We expect at least 30% uplift on revenue from this transaction and should allow Takeaway.com to achieve profitability in Germany earlier than expected, at least by FY20 on our estimates."At 0910 GMT, Takeaway shares were up 26% to €56.40 while Delivery Hero was up 12% to €30.86. Shares in London-listed online food order and delivery service Just Eat were 5.4% higher at 602.80p.