June 20, 2014

Online food ordering company foodpanda acquires Delivery Club

Mergers and acquisitions can happen for a number of reasons, ranging from bringing on new talent to gaining access to complementary technology to enhance what a company is able to offer. For two companies providing similar services, combining them in a merger or acquisition can sometimes mean creating a new leading company in the market. 

It was recently announced that foodpanda, an online food ordering company, has acquired a company called Delivery Club, according to a Tech Crunch article. As the article details, foodpanda is planning to expand into 50 countries by 2015. The acquisition of Delivery Club means the two companies will become the leading food service delivery company in Russia. In this case, foodpanda acquired a competitor. 

The article goes on to explain that as part of its expansion, foodpanda has maintained a focus on emerging markets. According to an article in the Economic Times, foodpanda plans to expand its market share in India, aiming for gaining a 10-15 percent share of the market. Foodpanda founder Rohit Chadda said the company looks to accomplish this by 2017.

With this acquisition strategy, foodpanda looks to expand its services into new geographical regions. It also looks to take a chunk out of the competition by acquiring Delivery Club. As we discussed recently, Priceline.com recently acquired Opentable. Through this deal, Priceline could look to expand its services, which are centered around online hotel and travel related reservations, to include the restaurant market. Opentable allows users to make restaurant reservations online. 

When a company is looking to expand or become a top contender in the market, a merger or acquisition could be the next move. However, many factors go into planning these types of deals, including timing and due-diligence. An M&A advisor can provide expert counsel about how to plan the strategy that makes the most sense for your company.