11th Jun 2020 05:26
(Alliance News) - Anglo-Dutch meal delivery firm Just Eat Takeaway.com NV agreed to acquire US peer Grubhub Inc for USD7.3 billion to form the world's largest online food delivery company outside of China, they announced Wednesday.
The deal comes as both companies have experienced strong growth in the wake of the coronavirus pandemic from customers stuck at home who have boosted digital orders.
The combined company will have a major presence in four key markets – the US, the UK, Germany and the Netherlands – and position the enterprise for greater growth in the US, they said in a news release.
Grubhub has been effective in navigating the "fragmented" US market – but "the US remains an underpenetrated market" that is "nowhere near its end-state," the companies said.
"Just East Takeaway.com will prioritize sustainable growth over profits, as this has been a major driver of its strategy and success in Europe," the press release said.
Grubhub had held talks previously with ride-hailing giant Uber, but the discussions fell apart over price after Uber proposed USD6 billion, a banking source told AFP recently.
Under the Just Eat Takeaway.com deal, which must be approved by shareholders of both companies, investors in Grubhub will receive 0.6710 of Just Eat Takeaway shares for each Grubhub share.
That values Grubhub at USD75.15 a share, compared with a closing price Wednesday of USD59.05.
Shares of Grubhub surged 5.9% to USD62.50 in after-hours trading Wednesday.
Just East Takeaway, which had confirmed earlier its interest in the deal, suffered a 13% drop in shares to EUR85.88 in Wednesday's session in Amsterdam.
Its London shares closed 13% lower at 7,626.00 pence on Wednesday.
Both companies have prospered in the wake of the Covid-19 upheaval, with Just Eat Takeaway seeing orders bounce by 41% in April and May compared with the year-ago period.
At Grubhub, the increase during this period has been 28%.
source: AFP
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