European firm buys Grubhub after Uber deal founders.
Deal gives Just Eat Takeaway a much sought-after foothold in the United States
AMSTERDAM/NEW YORK >> European food ordering firm Just Eat Takeaway. com said on Wednesday it had agreed to buy U.S. peer Grubhub in an allstock deal that, if completed, would create the world’s largest food delivery company outside China.
The deal would create “a company built around four of the world’s largest profit pools in food delivery: the U.S., the UK, the Netherlands and Germany,” the companies said in a joint statement.
The merger would open up a new market to Just Eat Takeaway, which has strong positions around Europe and in Canada.
For Grubhub, the deal offers an escape from the antitrust concerns that plagued its talks with the Uber Eats division of ride-hailing firm Uber Technologies.
Chicago-based Grubhub, which has a market cap of about $4.3 billion, was approached by Uber in May for an allstock deal that fell apart this week.
Uber did not immediately respond to requests for comment.
Grubhub’s stock price fell 3% and Just Eat Takeaway shares closed more than 13% lower in Amsterdam after the companies disclosed they were in talks in the late afternoon.
Experts say consolidation is long overdue in the U.S. restaurant delivery sector, where demand is surging, especially as many people stay home to combat the spread of the novel coronavirus.
Just Eat Takeaway said it expects to close the deal in the first quarter of 2021, pending shareholder and regulatory approval.
Chris Sagers, who teaches at Ohio’s
Cleveland-Marshall College of Law, said a deal between Grubhub and Just Eat Takeaway should win easy approval.
The combined company will be headquartered in Amsterdam.
In a presentation, the pair said Just Eat Takeaway had 2019 revenues of $1.7 billion, compared to Grubhub’s $1.4 billion.
In a trading update, the companies said that order growth was up 41% across the companies’ main markets in April and May, as the coronavirus outbreak led to a surge in use of online food services.
Billionaire Chief Executive Jitse Groen founded Takeaway in 2000 while still a student, and oversaw its growth through a series of acquisitions, including a 2018 deal to buy the German operations of rival Delivery Hero.
Groen owns a 10.29% stake in Just Eat Takeaway ahead of the Grubhub deal.