Just Eat beats Uber to snap up Grubhub for £5.8bn
European food delivery service Just Eat Takeaway has agreed to buy the US-based app Grubhub for $7.3bn (£5.8bn) in a deal that would create the world’s largest food delivery service outside China.
Confirmation of the all-stock takeover deals a blow to Uber, which has its own food delivery business and was reportedly in discussions with Grubhub.
The tie-up will give the Netherlands-based Just Eat Takeaway access to the lucrative food delivery market in the US, with the combined business able to serve customers in 25 countries. Along with the US, these include some of the world’s most profitable food delivery markets – the UK, Netherlands and Belgium.
Under the terms of the deal, which will need approval from both sets of shareholders, Grubhub’s shareholders would own 30% of the combined group.
There has been a surge in demand in the food delivery market during the pandemic, as government shutdowns prevented restaurants from serving diners at their premises.
The deal comes less than six months after Takeaway.com won a fierce £6.3bn bidding battle to buy Just Eat, fighting off its rival Prosus, the Amsterdam-listed offshoot of the South African technology group Naspers.
Jitse Groen, the chief executive and founder of Just Eat Takeway described himself and the Grubhub boss, Matt Maloney, as “the two remaining food delivery veterans in the sector”, adding that they started their businesses on different continents at the turn of the century.
“Both of us have a firm belief that only businesses with high-quality and profitable growth will sustain in our sector,” Groen said.
When Grubhub was founded, the
online takeaway industry did not exist in the US, Maloney said. “Combining the companies that started it all will mean that two trailblazing start-ups have become a clear global leader. We share a focus on a hybrid model that places extra value on volume at independent restaurants, driving profitable growth,” he added.
Just Eat Takeaway and Grubhub together processed 593m orders in 2019 and have more than 70 million active customers globally.
The takeaway delivery market expanded by almost 20% in 2019 in the UK, excluding Northern Ireland, according to the analysis firm Kantar.