Just Eat Takeaway acquires Grubhub for £5.75bn

Consolidation in the ultra-competitive global food delivery sector continues apace, with Just Eat Takeway (JET) agreeing to purchase major US-based operator Grubhub in a deal valued at £5.75 billion.

The announcement comes shortly after the termination of talks between Uber and Grubhub, who had long considered a tie-up, and a statement by the Competition and Markets Authority (CMA) that it is to extend the deadline for its enquiry into Amazon’s investment in Deliveroo, which had earlier been given provisional clearance.

The JET acquisition of Grubhub creates the world’s largest online food delivery company outside of China that will be focused on holding leadership positions in four of the world’s largest pools in online food delivery – the US, UK, Netherlands and Germany.

Jitse Groen, founder and CEO of JET, said: “Only businesses with high quality and profitable growth will sustain in our sector. I am excited that we can create the world’s largest food delivery business outside China. We look forward to welcoming Matt [Maloney, founder and CEO of Grubhub] and his team to our company and working with them in the future.”

As the food delivery market consolidates, JET has recognised that its main competitors are no longer from Europe but are instead international players and this is a key strategic driver behind its move to acquire Grubhub.

The combined group will have over 70 million active customers, who in 2019 made over 590 million orders that drove revenues of $3 billion. For Q1 the combined orders placed hit almost 160 million.

It remains to be seen how the announcement of this significant deal will impact the CMA’s decision on Deliveroo and Amazon because part of the reason for the extension to the deadline related to concerns expressed by competitors – including JET.