Grubhub struck a deal Wednesday to merge with the European food delivery company Just Eat Takeaway after talks to join forces with Uber fell apart and competition mounts in the industry.
Grubhub, based in Chicago, agreed to merge with Just Eat Takeaway in a deal that gives Grubhub shares an implied value of $75.15, which amounts to an implied total equity value of $7.3 billion on a fully diluted basis.
“Combining the companies that started it all will mean that two trailblazing start-ups have become a clear global leader,” said Matt Maloney, CEO and founder of Grubhub, in a statement. “Supported by Just Eat Takeaway.com, we intend to accelerate our mission to be the fastest, best and most rewarding way to order food from your favourite local restaurants in North America and around the world.”
The deal comes after talks between Grubhub and Uber fell apart over concerns a merger between the food delivery and rideshare company would spur regulatory scrutiny. Several Democratic lawmakers expressed concerns over a deal that would merge two of the biggest food delivery companies.
Sens. Amy Klobuchar, D-Minn., Richard Blumenthal, D-Conn., Patrick Leahy, D-Vt., and Cory Booker, D-N.J., sent a letter to top antitrust officials last month urging them to investigate the proposed merger.
“Consumers should be able to look forward to a future in which online food delivery is more efficient, more innovative, and less expensive,” they said in the letter. “A merger of two of the three biggest rivals in an already concentrated market risks [deprives] consumers of that outcome by potentially eliminating competition between the existing market participants.”
The merger with Takeaway.com is unlikely to draw as much concern among antitrust officials because it brings Grubhub under the wing of a business that operates outside of the U.S.
This will be Takeaway.com’s second merger this year. In January, the Dutch company bought its British peer Just Eat in a $7.8 billion deal. The merged company now has leading positions in three of the world’s four largest profit pools for food delivery: the U.K., Germany and the Netherlands, Just Eat Takeaway.com said in a statement.
Matt Maloney, CEO and founder of Grubhub, will join the Just Eat Takeaway.com management board and will lead the its North American businesses. Grubhub’s two current directors will join Just Eat Takeaway.com’s supervisory board. The companies expect the transaction to be completed in the first quarter of 2021.