200611 Grubhub
A Grubhub delivery person checks his phone in New York City. Image Credit: AFP

New York: Anglo-Dutch meal delivery firm Just Eat Takeaway.com agreed to acquire US company Grubhub for $7.3 billion (Dh23.8 billion) to form the world’s largest online food delivery company outside of China, they announced Wednesday.

The deal comes as both companies have experienced strong growth in the wake of the coronavirus pandemic from customers stuck at home who have boosted digital orders.

The combined company will have a major presence in four key markets — the US, Britain, Germany and the Netherlands — and position the enterprise for greater growth in the US, they said in a news release.

Grubhub has been effective in navigating the “fragmented” US market — but “the US remains an underpenetrated market” that is “nowhere near its end-state,” the companies said.

“Just East Takeaway.com will prioritize sustainable growth over profits, as this has been a major driver of its strategy and success in Europe,” the press release said.

Grubhub had held talks previously with ride-hailing giant Uber, but the discussions fell apart over price after Uber proposed $6 billion, a banking source told AFP recently.

Under the Just Eat Takeaway.com deal, which must be approved by shareholders of both companies, investors in Grubhub will receive 0.6710 of Just Eat Takeaway shares for each Grubhub share.

That values Grubhub at $75.15 a share, compared with a closing price Wednesday of $59.05.

Shares of Grubhub surged 5.9 per cent to $62.50 in after-hours trading Wednesday.

Just East Takeaway, which had confirmed earlier its interest in the deal, suffered a 12.6 percent drop in shares to 85.88 euros in Wednesday’s session in Amsterdam.

Both companies have prospered in the wake of the COVID-19 upheaval, with Just Eat Takeaway seeing orders bounce by 41 percent in April and May com[pared with the year-ago period.

At Grubhub, the increase during this period has been 28 per cent.