Just Eat to acquire Grubhub in major global delivery shakeup

The $7.3 billion deal will create the largest online food delivery company outside of China.
Photograph courtesy of Grubhub

Just Eat, the large Amsterdam-based food delivery company, on Wednesday said it has a deal to acquire Grubhub in a major shakeup in the market to bring food to consumers’ homes.

The all-stock deal is valued at $7.3 billion, representing the biggest acquisition in the burgeoning U.S. third-party delivery market. Just Eat owns the Canadian delivery company Skip the Dishes.

The combined company would have a major presence in four big markets: The U.S., the United Kingdom, the Netherlands and Germany. Last year, the combined group processed 593 million orders from more than 70 million customers.

The agreement, subject to approval from both companies’ shareholders, is expected to be complete by the first quarter of 2021. The combined company will be headquartered in Amsterdam, with Grubhub CEO Matt Maloney leading the combined company’s North America business.

“Combining the companies that started it all will mean that two trailblazing startups have become a clear global leader,” Maloney said in a statement.

Jitse Groen, CEO and founder of Just Eat Takeaway, will be the CEO of the combined company. “Matt and I are the two remaining food delivery veterans in the sector, having started our respective businesses at the turn of the century, albeit on two different continents,” Groen said. Just Eat management believes Grubhub is “the best food delivery company in the U.S.” and that the two companies are culturally similar, and both have positive EBITDA—or earnings before interest, taxes, depreciation and amortization.

The combined group generated $3 billion in revenues and $447 million in adjusted EBITDA in 2019.

The agreement ends weeks of speculation involving a Grubhub deal, which was said to be in talks with Uber before the European giant Just Eat stepped in.

The business of third-party delivery has been viewed as ripe for consolidation for months, particularly since Maloney himself questioned the profitability of delivery in a now-infamous shareholder letter in October.

As part of Just Eat, Grubhub believes it would be much stronger, giving it greater scale “to make strategic, long-term investment decisions,” particularly technology.

And, “by building a North American leadership position, Just Eat will be able to further strengthen both the Canadian and U.S. businesses,” the companies said.

Grubhub shareholders would receive American depositary receipts (ADRs) representing 0.671 Just Eat Takeaway shares for each Grubhub share they own, for an implied value of $75.15 per share. Grubhub shareholders would own about 30% of the combined company.


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