Just Eat Takeaway's swoop last week to acquire Grubhub from under the nose of Uber Technologies was the latest salvo in the battle for dominance in the global food delivery market.
Source: GrubHub |
Netherlands-based Just Eat Takeaway's $7.3 billion all-stock deal came after Grubhub and Uber had announced earlier that they had been in talks over a possible combination. Germany's Delivery Hero also had reportedly shown interest in U.S.-focused Grubhub.
Consolidation has been a constant theme in this sector as companies seek to overcome narrow margins and high marketing expenses with increased scale. A deal with Uber would have created a business with equal market share in the U.S. to the leader DoorDash but would also likely have raised antitrust issues. Instead, by joining forces with Just Eat Takeaway, which operates in 23 countries but not the U.S., Grubhub can benefit from its partner's breadth of experience and gain that all vital scale through a transaction with greater certainty of execution.
"You're talking about, in my opinion, two of the best-in-class operators globally," Tom Forte, a D.A. Davidson & Co. equity analyst, said in an interview before Just Eat Takeaway and Grubhub announced a deal. "They ought to be able to share best practices."
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