Takeaway.com will be taking over all activities of its rival Delivery Hero in Germany. The two meal delivery services have been locked in conflict for years and now Delivery Hero has parted from its own country.
Germans still order by phone
Takeaway has acquired the German branch of Delivery Hero for almost a billion euros. The Dutch meal delivery service is willing to pay 508 million for its German rival and in addition will give its prey an 18 % interest in Takeaway.com, worth 422 million. To sweeten the deal even further, Delivery Hero gets to appoint an independent board member.
The takeover puts three German meal delivery platforms in Takeaway's hands: Lieferheld, Pizza.de and Foodora. Takeaway's management mostly hopes to generate synergies by integrating the companies. According to founder Jitse Groen, the deal is essential to achieve greater profitability because of the considerable scale increase.
Although the transaction will almost double the amount of Takeaway.com orders in Germany, Groen believes further growth is still possible as online food orders are not as ubiquitous in Germany as elsewhere in Europe. Groen told Dutch newspaper De Telegraaf that currently only 8 % of Germans order from Takeaway, even though the company leads the market. Germans still tend to order their fast food directly by telephone.
40 countries, but not at home
Delivery Hero, that sprung from incubator Rocket Internet, already had to acknowledge Takeaway's superiority on the Dutch market: back in August, it pulled the plug on Foodora in the Netherlands, barely two weeks after the company decided to sell its activities in Australia, France and Italy. The meal delivery service made that decision in order to focus on markets where leadership was at that point still possible, including Germany, where the plan turned out unsuccessful. Delivery Hero will still be active in some forty countries, including China, Finland, India, Mexico, South Korea and the United Kingdom, but not its native Germany.
Delivery Hero plans to use the sale's revenue to accelerate investments and growth. In 2019, they hope to increase their turnover by 45 million euros, but they also expect a loss of 250 million. The group does believe it will manage to get a break-even in Europe in the second half of 2019.