European Food Delivery Company To Buy Grubhub After Uber Talks Fall Through

Just Eat Takeaway.com N.V. TKAYF, a European food delivery company, will purchase Grubhub Inc. GRUB in an all-stock deal.

What Happened

The deal values Grubhub shares at $75.15, which gives the Chicago-based food delivery firm an implied value of $7.3 billion calculated on a fully diluted basis. The deal is expected to be closed in the first quarter of 2021.

The news arrives after Grubhub's talks with Uber Inc. UBER over a merger foundered due to antitrust issues.

Uber and Grubhub had agreed on a price ratio of $.1925 Uber shares for each Grubhub share at a volume-weighted average price of nearly $70 per share. 

However, prevailing concerns over Uber’s support to Grubhub in the regulatory process scuttled the deal, reported CNBC.

Grubhub shares closed nearly 2% higher on Wednesday.

Why It Matters

Uber and Grubhub are two of the three major food delivery companies operating in the United States. The third is DoorDash.

According to CNBC, the merger between the U.S. and European companies is unlikely to be subject to as intense regulatory scrutiny as the failed Uber-Grubhub deal.

According to Just Eat, the merger will create the world’s largest online food delivery company outside of China, measured based on Gross Merchandise Value and revenues.

Under the deal, Grubhub shareholders will receive American depositary receipts (ADRs) representing 0.6710 Just Eat ordinary shares in exchange for each Grubhub share.

The combined entity’s shares will be listed in Amsterdam; its North American headquarters will be in Chicago. Just Eat will list ADRs in the U.S.

Grubhub CEO Matt Maloney will join Just Eat management and lead the company in North America.

Price Action

Grubhub shares closed the regular session 1.95% higher at $59.05 on Wednesday and traded 4.40% higher, at $61.65, after-hours.

Just Eat Takeaway.com shares closed 13.29% lower at $97.32 on Wednesday in Amsterdam. The company’s OTC shares closed 6.32% lower at $99.30.

Image: Grubhub