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After Rejecting Uber Merger, Grubhub To Merge With Europe’s Just Eat Takeaway


06/11/2020


After Rejecting Uber Merger, Grubhub To Merge With Europe’s Just Eat Takeaway
Grubhub has decided against a merger with Uber Eats after almost a month of deliberations since the offer was made by Uber and has instead decided to merge with the European company Just Eat Takeaway. The deal, which will see transfer of stocks only, is expected to be by the first quarter of 2021.
 
The offer for the merger was made by Uber with intention of creating a combined company that would have had the capacity to not only rival but also to potentially surpass the current market leader DoorDash. The importance of the now cancelled deal can be gauged form the fact that it acute was already drawing regulatory.
 
This is because it would have significantly added on to the market presence of Uber Eats as Grubhub owned a number of brands including Eat24, Seamless, and MenuPages. Soon after the emergence of the news about the negotiations between the two companies for a potential merger became public in May, a number of US Senators drew the attention of the country’s top antitrust officials towards the deal urging the regulator to closely scrutinize the potential merger. 
 
According to reports, one of the primary reasons that Uber had in recent days seemingly lost interest in the deal was because of the possible antitrust trouble. Another reason was some of the unscrupulous business practices of Grubhub. The company is known to have used misleading websites and phone numbers in order to charge burdensome, even predatory fees and setting up websites for restaurants that were not even present on the company’s platform.
 
While there were potentially justified reasons in favor of Uber for the deal not happening, the company needs ot expand fats in order for it to turn profitable. “Like ridesharing, the food delivery industry will need consolidation in order to reach its full potential for consumers and restaurants,” an Uber spokesperson told the media. “That doesn’t mean we are interested in doing any deal, at any price, with any player.”
 
The mounting pressure from US lawmakers over the potential deal had also reportedly spooked Grubhub. There is likely to be some scrutiny from antitrust regulators of he deal with Just Eat Takeaway, but potentially not to the extent as the now broken deal with Uber. Just Eat Takeaway itself was formed after a recent merger of the British food delivery service company Just Eat and Dutch company Takeaway.com.
 
“Combining the companies that started it all will mean that two trailblazing start-ups have become a clear global leader,” Matt Maloney, Grubhub’s CEO, said in a statement. “We share a focus on a hybrid model that places extra value on volume at independent restaurants, driving profitable growth.”
 
“Both of us have a firm belief that only businesses with high-quality and profitable growth will sustain in our sector,” Just Eat Takeaway CEO Jitse Groen said in a statement. “I am excited that we can create the world’s largest food delivery business outside China. We look forward to welcoming Matt and his team to our company and working with them in the future.”
 
(Source:www.verge.com)