Takeaway.com and Delivery Hero are combining their German operations

Germany has been unified — again. This Vereinigung does not involve Prussia extending its sway over Bavaria, or the West absorbing the East. Instead, Takeaway.com and Delivery Hero are combining their German operations to create a dominant meal delivery platform owner. Investors are rejoicing. Trust busters should arch eyebrows. Why? In both cases, network advantage is the vital ingredient. The more demand and supply an online platform can aggregate — for pizzas, machine tools or Kendall Jenner selfies — the more unassailable it becomes. “Winner takes most” describes it. News that Takeaway.com is buying the German bits of Delivery Hero lifted the shares of the Amsterdam-listed business 30 per cent. The shares of the vendor, which are quoted in Frankfurt, rose 11 per cent, because the deal gives it an 18 per cent stake in the purchaser as well as €508 million in cash. The implicit deal price was 17 per cent higher by noon than the headline figure. That initial number equated to a 9.6 times multiple of enterprise value to the 2018 sales of Delivery Hero in Germany… The parents are lossmaking. So is Just Eat, whose shares rallied too. The difference is that the UK’s dominant delivery platform was profitable before competitive threats from Uber Eats and Deliveroo spooked it.