Just Eat Takeaway Acquisition Of Grubhub Creates Global Player

Just Eat

Just Eat Takeaway’s deal to buy Chicago-based Grubhub for £5.8bn does little to consolidate delivery market, but could fuel further expansion

The $7.3 billion (£5.8bn) acquisition of Chicago-based Grubhub by the Netherlands’ Just Eat Takeaway is to create a new player in the international market for food-delivery apps.

The companies announced the deal late last week, after merger talks between Grubhub and Uber Eats stalled amidst regulatory scrutiny.

An acquisition of Grubhub by Uber Eats would have meant significant consolidation in the US market, raising regulatory concerns.

But Just Eat Takeaway has a minimal presence in North America.

Just Eat grubhub
Just Eat


Grubhub has said it plans to combine its US operations with those of Canada’s SkipTheDishes, acquired by Just Eat in 2016.

But apart from that, there is minimal geographic overlap between Just Eat Takeaway and Grubhub.

Industry watchers noted that this means the company must continue to spend heavily on marketing  in the face of heavy competition in the US from the likes of Uber Eats, Doordash and Postmates.

However, the deal does give Grubhub more resources to back its pursuit of market share.

If the deal goes ahead, pending shareholder and regulatory approval, it will create the world’s biggest food delivery company outside of China, with nearly 70 million active customers and 600 million orders per year.

Just Eat Takeaway chief executive Jitse Groen started Takeaway.com as a student in the Netherlands in 2000, at the same time that Maloney was founding Grubhub.

Takeaway went on to acquire more than a dozen rival sites, culminating with a £6bn merger with Just Eat approved by the UK’s competition regulator only in late April.

Rising demand

Other international competitors include Germany’s Delivery Hero and China’s Meituan Dianping,  along with investors such as Amazon, SoftBank’s Vision Fund and Naspers’ Prosus.

Food delivery apps have seen a surge in demand during the global coronavirus lockdown.

But before the pandemic, Just Eat Takeaway and Grubhub last year reported a total of $3bn in revenues and profits of $447m.

Analysts have said the food delivery market is long overdue for consolidation, and a merger between Grubhub and Uber Eats would have given the combined firm a dominant market share in some areas, such as New York, allowing it to reduce costs.

But Uber Eats’ efforts to make a deal led to it being accused by David Cicilline, chair of the House antitrust subcommittee investigating the tech sector, of “pandemic profiteering”.

Uber Eats said last Wednesday it would no longer pursue a deal.

“Like ridesharing, the food delivery industry will need consolidation in order to reach its full potential for consumers and restaurants,” Uber said in a statement at the time.

“That doesn’t mean we are interested in doing any deal, at any price, with any player.”

Read also :
Click to read the authors bio  Click to hide the authors bio