Europe’s Just Eat Takeaway.com NV has agreed to buy U.S.-based Grubhub Inc. (NYSE:GRUB) for $7.3 billion U.S.
Amsterdam-based Just Eat Takeaway said it will pay $75.15 U.S. per share for Grubhub in an all-stock deal with an equity value of $7.3 billion U.S. The megadeal will create one of the world’s largest meal-delivery companies as the coronavirus pandemic drives a surge in demand.
Uber Technologies Inc. (NYSE:UBER) had been in acquisition talks with Grubhub for at least a month but was unable to reach a deal. Questions were raised about whether U.S. regulators would approve such a deal. The two companies had nearly aligned on a price but remained at odds over other issues, including terms of a break-up fee for Grubhub if the deal could not be completed.
Now, Grubhub will launch Just Eat Takeaway into the U.S. market, broadening its already-global reach that includes Australia, Brazil and Canada, in addition to its home base in Europe.
DoorDash Inc. is the current market leader in the U.S. meal-delivery sector, with Uber Eats a close second. Grubhub currently has a 23% market share in the U.S.
Gross food sales for Grubhub rose 8% to $1.6 billion U.S. in the first quarter, and the company reported a net loss of about $33 million U.S. Analysts have said the unprofitable model in food delivery is unsustainable and expected consolidation within the industry.
For Uber, losing the deal is a blow to the company’s plan to increase revenue and eventually turn a profit from food delivery. That strategy was especially urgent with the pandemic decimating Uber’s main business of ride hailing.
In a written statement, Uber said the company believes the industry needs consolidation but that it is not interested in “doing any deal, at any price, with any player.”