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Just Eat Merges with GrubHub in $7.3B Deal

Just Eat Merges with GrubHub in $7.3B Deal

The merging of Just Eat and Grubhub will create one of the largest food delivery companies in the world.

Two food delivery giants — Just Eat Takeaway.com and Grubhub — are merging in a $7.3 billion deal that will create one of the world’s largest delivery companies. Just Eat Takeaway.com said late Wednesday that it was acquiring Chicago-based Grubhub after talks with ride-hailing titan Uber fell through amid concerns over antitrust scrutiny. Though both parties had agreed on a price ratio, the companies could not agree on how Uber would support Grubhub through the regulatory process.

The deal is expected to close in the first quarter of 2021, with the combined company to be headquartered in Amsterdam, and its US headquarters in Chicago. Just Eat Takeaway.com and Grubhub processed 593 million restaurant orders in 2019 and have about 70 million users worldwide. Combined, they will be the largest restaurant delivery company outside China.

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Just Eat Takeaway.com said it will acquire 100 percent of Grubhub’s shares at an implied value of $75.15 per share. Grubhub shareholders will receive depository receipts representing a portion of shares in the new company.

Matt Maloney, Grubhub’s founder and CEO, will join Just Eat Takeaway.com’s board and will lead the company’s North American business. The merger will let the companies share technology and marketing costs and provide the broadest range of services to restaurants and consumers.

Takeaway.com and Grubhub, both founded in the early 2000s, were some of the earliest entries in the sector. But they’ve been joined by a host of others, including Uber Eats, DoorDash, Deliveroo and Postmates.

Customers jump freely between the services, which makes it difficult to deliver stable sales. Aggressive discounting and heavy marketing costs to win new users have also taken a toll on profits, and restaurants have been pushing for lower fees.

As a result, consolidation has been a constant in the industry. Grubhub acquired Seamless in 2013, while DoorDash bought the upscale service Caviar last year. In January, Takeaway.com bought its British rival Just Eat for $7.8 billion. Combined, those companies have 48 million active users and reported revenue of $1.7 billion in 2019. Grubhub has 23 million active users and reported revenue of $1.3 billion.

The coronavirus pandemic has boosted sales for both Just Eat Takeaway.com and Grubhub, with restaurants shuttered, more people staying home and ordering takeout food. Grubhub’s orders grew 28 percent over the prior year in April and May, while Just Eat Takeaway.com’s orders grew 41 per cent.