Food Delivery giants competition through M&A

The food delivery industry is set to benefit largely from the COVID-19 pandemic. The pandemic has boosted sales of food delivery companies, with restaurants shuttered, more people staying home and ordering takeout food. Many food delivery companies which are in a boom, now faces further competition as lockdown demand eases. As a result, the food delivery sector is undergoing a major consolidation right now, and more are expected. Recently Uber (NYSE: UBER) finally got its food delivery company, acquired its competitor Postmates after the company lost out in a bid for Grubhub last month. Meanwhile, Grubhub (NYSE: GRUB) was purchased by Amsterdam-based Just Eat Takeaway (AMS: TKWY) last month and this merger creates the largest food delivery business in the world outside China.

Uber, Postmates Agree on $2.65 Billion All-Stock Deal

Postmates agreed to be acquired by Uber in a $2.65 billion, all-stock deal, the two companies announced on Monday. The company spent nearly 5% of its worth to buy Postmates and the ride-hailing giant can improve its market share to 37%, from its current position of 29%. The company reported, the demand for rides by far Uber’s biggest business plunged 75% in the second quarter from a year ago. Meantime, the orders for its Uber Eats food delivery service doubled during the same period.

“Uber and Postmates have long shared a belief that platforms like ours can power much more than just food delivery - they can be a hugely important part of local commerce and communities, all the more important during crises like COVID-19,” Uber CEO Dara Khosrowshahi said in a statement.

Postmates founded in 2011, the company was one of the first to let customers in the US order meal delivery using a smartphone app. Currently, the Postmates platform operates in all 50 states and offers customers access to the most selection of merchants in the US with more than 600,000 restaurants. Postmates’ app will continue to run separately after the acquisition, but it’ll be able to tap into a merchant and delivery network combined with Uber Eats.

"Uber and Postmates have been strong allies working together to advocate and create the best practices across our industry, especially for our couriers,” Postmates co-founder and CEO Bastian Lehmann said.

Netherlands-based Just Eat Takeaway purchase Grubhub for $7.3 billion

On June 10 Amsterdam-based Just Eat announced that it was acquiring Chicago-based Grubhub. The deal is expected to close in the first quarter of 2021, with the combined company to be headquartered in Amsterdam, and its US headquarters in Chicago. GrubHub is currently the number the three-meal service provider in the United States. It serves more than 1,600 cities there. Just Eat, which was founded in 2000, is an Amsterdam-based company that does business with over 155,000 connected restaurants.

“Matt and I are the two remaining food-delivery veterans in the sector, having started our respective businesses at the turn of the century, albeit on two different continents,” Jitse Groen, CEO and founder of Just Eat, said in a statement.

This merger will create the largest online food delivery outlet outside of China, according to the companies, and will focus on the US, UK, Germany, and the Netherlands. Grubhub processed 180 million orders for 23 million customers last year. While Just Eat Takeaway processed 413 million orders for 48 million customers.

“When you have mergers and acquisitions that improve the quality of your product, the ability to grow and bring better efficiency, it’s good for all” – Roger Agnelli.

This service became very demanded and this trend will grow

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Yes you are right.

Personally, in my case, food delivery is a great option. I, unfortunately, don’t have time to cook at home, so delivery services save me from starving to death haha. Besides, I’m on a keto diet and I can’t eat many ordinary dishes. So besides the fact that I don’t have time to cook, I also don’t have many options where to order food. Thank God I found a great article where I found out that I can eat some variations of Taco Bell dishes.

The global food delivery market is valued at nearly $100 Billion. and we are witnessing continuous growth in collaborations/ partnerships between restaurants and online food delivery applications.

Absolutely! And even in the times to come, it will boost further. These mergers and acquistions have a great potential to create major changes in the food delivery market.

Ooh how’s the keto diet going for you? I know a friend who has lost about 30-40 lbs from it and has kept it off for years now doing keto!

Absolutely! And with the food delivery culture from all sides of the world, this industry has so much to grow about and it also helps employment as more delivery people are given jobs.

For me, this service has become very much in demand, and I think they are doing a good job.

During the pandemic, when everyone was locked up at home, food delivery was a very important and necessary part of people’s lives.