Food delivery platform 'Just Eat Takeaway' acquiring Grubhub for $7.3B

Yahoo Finance’s Emily McCormick joins Heidi Chung to discuss the Amsterdam-based company gearing up to purchase Grubhub in an all-stock transaction.

Video Transcript

- After failed talks with Uber Eats, Grubhub is set to be acquired by Dutch food delivery company Just Eat Takeaway. We have Yahoo Finances Emily McCormick with us to break it all down. Emily, what do we know so far? It's still pretty early on in the announcement, right?

Absolutely Heidi. Well what we know right now is this is a mass merger between these two companies. Really seeing just more consolidation in the food delivery space globally. So now we have Just Eat takeaway agreeing to acquire Grubhub in a deal that values Grub at about $7.3 billion, and that's going to create one of the largest food delivery companies in the world outside of China.

Now Grubb shares are on the rise after this deal. They're up about 4.5% now, and up now about 27% for the year to date. Now put together, this new combined company will serve more than 70 million active customers and it's going to be one of the leading services in the US, UK, Germany, and the Netherlands.

The company's also said on an M&A call this morning that Grubhub and Just Eat Takeaway together generated sales of about 2.7 billion euros, or the equivalent of about $3 billion, and [? Ebita ?] up about 400 million euros or $450 million last fiscal year.

Now under terms of this deal, Just Eat Takeaway will be paying the equivalent of $75.15 per share for Grubhub. It is an all stock transaction. Grubhub CEO Matt Maloney is leading the combined companies North America business, and is also joining the new companies board.

Now as you mentioned, this is coming after months of reports and weeks in particular that we've seen Uber talking about acquiring Grubhub and potentially combining that with its existing Uber Eats business. But there had been speculation about whether US regulators would give this deal the green light because of antitrust concerns.

So this was potentially something that Uber Eats missed out on. Again, we are seeing just a huge amount of consolidation in the space. Both Grubhub and Just Eat Takeaway have previously acquired other companies in the past. So as we see just the competition heating up in food delivery, potentially just looking at more mergers, more acquisitions in the space. That'll be something to watch going forward as well. Heidi.

- All right. Emily McCormick, thank you so much for those details.