M&As seem to continue unhindered in the world of online food delivery. Today, two pioneers in food delivery, Just Eat Takeaway N.V. and Grubhub Inc., have reportedly merged in USD 7.3 billion agreement that will create one of the largest delivery companies in the world.
According to sources familiar with the knowledge of the matter, the agreement would create a company built around four of the world's largest profit pools in food supply: The United States, the United Kingdom, the Netherlands, and Germany.
Amsterdam-based Takeaway.com acquired Chicago-based Grubhub in an all-stock deal, snatching it away from Uber, which had been reportedly trying to merge Grubhub with its Uber Eats.
Uber stated in a statement that the food supply industry needs to consolidate, but this does not mean that they are keen to deal with any player at any price. Grubhub CEO Matt Maloney confirmed that Uber prompted Just Eat Takeaway to come up with its offer.
Maloney has known Jitse Groen, Chief Executive of Just Eat Takeaway since 2007 and both firms have similar models where consumers can conveniently find restaurants and order food from them. He said that the European company presented an offer at a cost that made the decision very easy. The deal also provides financial strength and flexibility to Grubhub.
Meanwhile, the stock price of Grubhub increased by almost 6% in the aftermarket trade, and the shares of Just Eat Takeaway were more than 13% lower in Amsterdam when firms announced they had entered into negotiations late in the afternoon.
Experts agree that consolidation in the US restaurant supplier market, where demand is increasing, has been overdue for a long time, particularly as many people remain home to fight against the spread of the new coronavirus.
Just Eat Takeaway expects the agreement to close in the first quarter of 2021 and is subject to shareholder and regulatory approval. The joint venture will have its headquarters in Amsterdam.