GrubHub Inc (NYSE:GRUB) has reportedly shunned merger talks with Uber Technologies Inc (NYSE:UBER) and has instead embraced an acquisition deal from a European company called Just Eat Takeaway.
Just Eat Takeaway announced on Friday that it struck a strategic $7.3 billion deal to acquire Grubhub. The acquisition will allow the European company to expand its reach in the U.S market, thus boosting its profitability. The two companies agreed to an all-stock acquisition in which Just Eat Takeaway will acquire Grubhub shares at $75.15 per share. This is 27 percent higher than the $59.05 closing price of Grubhub’s stock at the end of the trading session during which the announcement was made.
“I am excited that we can create the world’s largest food delivery business outside China,” stated Just Eat Takeaway CEO Jitse Groen.
Matt Maloney, the founder, and CEO of Grubhub, will reportedly join the board of directors at Just Eat Takeaway. He will also remain at the helm to oversee the company’s operations in its North American market. Maloney pointed out that the two companies will focus on providing more value at independent restaurants. This will contribute towards strong, profitable growth.
The deal between Grubhub and Just Eat Takeaway is a huge lost opportunity for Uber
Uber was also interested in acquiring Grubhub, but it lost the opportunity as the European company swooped in for the win. If Uber had secured the deal, it would have secured a strong footing in the food and food delivery industry. The deal would have also allowed Uber to compete more effectively in the highly competitive space.
There are a number of reasons why Uber lost the potentially lucrative deal with Grubhub. One of those reasons is antitrust issues where Uber would reportedly have an unfair advantage over the competition. Nevertheless, Uber remains optimistic about the food delivery business. An Uber spokesperson noted that the company needs to boost its food delivery business so that it can profit. The company believes it will need consolidation to achieve its full potential for restaurants and its customers.