Let’s talk crypto, Metaverse, NFTs, CeDeFi, and Stocks, and focus on multi-chain as the future of blockchain technology. Haha, Take it easy. Let us all WIN!
In a deal worth $7.3 billion, Just Eat Takeaway.com will acquire Grubhub. This comes after Uber has pulled out of merger talks due to antitrust concerns.
Formerly a Danish and currently British online food order and delivery service Just Eat Takeaway.com NV (AMS: TKWY) said on Wednesday that it had agreed to purchase Grubhub Inc (NYSE: GRUB) in an all-stock deal for $7.3 billion. As a result, Grubhub founder and chief executive, Matt Maloney, is set to join Just Eat Takeaway.com board members to oversee all its business in the American market.
“I am excited that we can create the world’s largest food delivery business outside China,” said Jitse Groen, chief executive at Just Eat Takeway.com. The merger has come at a time when food delivery services are experiencing a sharp uptick due to the coronavirus social distancing.
Furthermore, it is anticipated that post-COVID-19 businesses might resume slowly and some of the measures in place might continue being in place for a while. The popularity in the food delivery services is making the industry pick at a very fast pace in comparison to other sectors of the market, which essentially are still being affected by the coronavirus.
Competition Drives the Market
However, the competition in the market is making the existing companies struggle to dominate and win as many customers as anticipated. Companies including Uber Eats, DoorDash, Grubhub, and also Just Eat have spent millions of dollars in marketing their products to attract more consumers.
“Competition and pricing pressure will be fierce going forward,” said Daniel Ives, the managing director of equity research at Wedbush securities. Grubhub Inc., which controls around 24% of the American market, had attracted bids from Uber and Just Eat that are looking forward to increasing their control in the market.
Food and delivery services have been merging at an unprecedented rate in a bid to keep up with the growing level of competition. In the past two years, there have been around 25 mergers and acquisitions in the food and delivery sector that are valued at $20.12 billion.
Just Eat Takeaway and Grubhub Deal Welcomed
Just Eat Takeaway.com is a combination of Just Eat and Takeaway.com a deal that happened at a cost of $7.8 billion. As a result, the new entity can now face competitors in the European market including Uber Eats and also from Deliveroo.
Uber Technologies Inc (NYSE: UBER) lost the bid to Just Eat to acquire Grubhub, a move that was welcomed by Senator Amy Klobuchar of Minnesota. “During this pandemic, when millions are out of work and many small businesses are struggling to stay afloat, our country does not need another merger that could squelch competition,” she said in a statement.
Just Eat Takeaway.com shares are down 0.070% to trade around 85.44 EUR in the pre-market, while those from Grubhub Inc. are up 7.20% to trade around $63.30.