Last Updated on June 15, 2020 by Mike Dean
Amsterdam-based delivery giant Just Eat acquires Grubhub
European company Just Eat Takeaway closed a deal to acquire U.S.-based food delivery company Grubhub for $7.3 billion. This acquisition marks the birth of one of the largest meal-delivery companies in the world, as the COVID-19 pandemic sparks a spike in food-delivery orders.
The unprecedented deal serves as a massive blow with Uber Technologies, which was in talks with Grubhub regarding acquisitions for the past month. The negotiations between Uber and Grubhub were stalled due to the companies remaining at odds regarding several issues, including the terms of a break-up fee for Grubhub, should the deal not be completed.
Tensions rose between the management of both Uber and Grubhub in recent weeks. One of the heated points under discussion was the role of Maloney and other Grubhub executives at Uber after the acquisition, according to an anonymous source familiar with the talks.Grubhub announced that it will be launching Just Eat Takeaway in North America, effectively expanding its already-global reach. This move is in line with the recent sentiments of Takeaway’s founder Jitse Groen, who has recently set his eyes on the aggressive expansion of the food-delivery giant.
Just Eat Takeaway stated that Maloney will take a seat with the board of directors and run the North American business. “Matt and I are the two remaining food delivery veterans in the sector, having started our respective businesses at the turn of the century, albeit on two different continents,” said Just Eat Takeaway founder Jitse Groen in a statement. “Both of us have a firm belief that only businesses with high-quality and profitable growth will sustain in our sector.”
The food delivery industry has been saturated with fierce competition, despite the surge in food delivery orders sparked by the pandemic. Profit margins have narrowed due to the mounting pressure to sign the most popular restaurants and entice new customers.
Experts have long stated that the unprofitable business model of food delivery is unsustainable. The prediction has become more of reality throughout the COVID-19 crisis. Losing the Grubhub deal is a massive blow to Uber’s plan to increase revenue and profit from the harsh food delivery industry.
The deal was even more critical to Uber now, as the pandemic effectively decimated profits from Uber’s ride-hailing services. Uber has cut jobs and other side businesses as a result. The company has cut jobs and side businesses as a result.
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