AMSTERDAM/LONDON (Reuters) - Just Eat Takeaway said on Thursday its proposed $6 billion takeover of Grubhub to create a trans-Atlantic giant would give it the upper hand in the online food delivery market, where competitors are scrambling for share.
Buying Grubhub (GRUB.N) would see Jitse Groen, Takeaway’s (TKWY.AS) 42-year-old CEO, become head of the world’s biggest food delivery business outside China, ahead of Uber Eats (UBER.N), which yesterday walked away from buying the U.S. firm.
Groen has only just received antitrust approval for Takeaway’s all-share acquisition of larger British rival Just Eat, which beat a rival cash bid from tech giant Prosus.
Takeaway competes with Uber Eats, Deliveroo and Delivery Hero in Europe, while in the U.S., Grubhub faces Doordash, Uber and Postmates. All made losses in 2019.
“There are quite some players currently in the food delivery market that are burning cash” to push out competitors, Groen said Thursday, defending the deal.
“It’s pretty obvious to us that as long as we are large, (profitable at an operating level), and very dominant in the markets that actually matter, that cannot happen to us.”
(GRAPHIC - Takeaway M&A deals since late 2018: here)
Groen, who started Takeaway in his attic while still a student in 2000, argues that online food ordering is a “winner-takes-most” market, as the more restaurants sign up to one platform, the more likely customers are to use it.
Shares in Just Eat Takeaway were 1.6% lower at 84.16 at 1443 GMT, after closing more than 13% lower in Amsterdam ahead of the deal’s announcement on Wednesday.
Grubhub
