Just Eat Takeaway will acquire US food delivery player Grubhub in a bid to create one of the largest online takeaway businesses.
On Wednesday (10 June), Amsterdam-based takeaway business Just Eat Takeaway announced that it has entered an agreement to acquire US-based Grubhub in a deal worth $7.3bn. It said that the acquisition will create “the world’s largest online food delivery company outside of China”.
Just Eat Takeaway plans to pay $75.15 per share for Grubhub in an all-stock deal. After news of the deal emerged, Grubhub’s share price rose 4pc in extended trading to around $62.
The deal will help Just Eat Takeaway expand into the US market, bringing its footprint beyond its existing bases in Australia, Brazil, Canada and Europe.
The acquisition plans were announced just months after Just Eat finalised a merger with Dutch company Takeaway.com, creating a European takeaway behemoth. The merged business is now led by Takeaway CEO Jitse Groen.
According to Bloomberg, analysts have long expected a consolidation of brands in the food delivery market, as many of the big players in the industry rely on unsustainable, unprofitable models.
Just Eat Takeaway said that Grubhub is the only US takeaway business that is “culturally similar” to it, adapting and becoming profitable as the competitive situation in North America has changed in recent years.
Matt Maloney, CEO and founder of Grubhub, said: “Like so many entrepreneurs, we started modestly – restaurant by restaurant in our Chicago neighbourhood. Today, Grubhub is a leader across North America. I’ve known Jitse since 2007 and his story is much like mine.”
Maloney said that combining “the companies that started it all” will turn “two trailblazing start-ups” into a “global leader.”
“We share a focus on a hybrid model that places extra value on volume at independent restaurants driving profitable growth. Supported by Just Eat Takeaway.com, we intend to accelerate our mission to be the fastest, best and most rewarding way to order food from your favourite local restaurants in North America and around the world.”
Groen described himself and Maloney as the “two remaining food delivery veterans in the sector”.
“Both of us have a firm belief that only businesses with high-quality and profitable growth will sustain in our sector,” he added. “I am excited that we can create the world’s largest food delivery business outside China. We look forward to welcoming Matt and his team to our company and working with them in the future.”
Uber’s attempt to buy Grubhub
The announcement comes after reports of acquisition discussions between Grubhub and Uber.
The Verge suggested that a deal with Uber did not work out due to either antitrust concerns or Grubhub’s “unsavoury” business practices, which have included setting up delivery listings for restaurants that aren’t even on its platform.
Meanwhile, Bloomberg reported that Uber and Grubhub had nearly aligned on price but “remained at odds” over other issues, including the terms of a breakup fee if the deal couldn’t be completed.