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Amazon Partners With Just Eat On Meal Delivery In The United States, And Grubhub Invests


06/07/2022


Amazon Partners With Just Eat On Meal Delivery In The United States, And Grubhub Invests
Amazon has agreed to buy a 2 per cent share in Just Eat Takeaway.com's failing US meal delivery service Grubhub and will provide Prime members with access to the service for a year.
 
Just Eat Takeaway's shares have dropped 70% this year as shareholders requested that it sell or find a partner for Grubhub, which it purchased just last year for $5.8 billion in stock.
 
Credit Suisse stated in a note about the deal that the collaboration should improve Grubhub.
 
The bank stated that there has been "no crystallisation of value, albeit (the) door is open for more."
 
Just Eat shares were up 14 per cent at 15.70 euros at 0710 GMT in Amsterdam trade.
 
Amazon customers will receive free delivery on orders over $12 in the 4,000 cities where Grubhub operates, according to a partnership announced Wednesday as part of Amazon's July "Prime Day" promotion.
 
The agreement will increase traffic for Grubhub, which has lost market share to Doordash and Uber Eats as the COVID-19 pandemic fades.
 
In exchange, Amazon will obtain warrants representing 2% of Grubhub's shares, as well as an extra 13 per cent of shares if the arrangement brings Grubhub enough consumers.
 
"The agreement is expected to expand membership to Grubhub+, while having a neutral impact on Grubhub's 2022 earnings and cash flow, and be earnings and cash flow accretive for Grubhub from 2023 onwards," Just Eat Takeaway said in a statement.
 
Grubhub's gross assets were approximately 6.5 billion euros ($6.67 billion) at the end of 2021, according to the firm, and it recorded a pretax loss of 403 million euros in that year.
 
(Source:www.businesstimes.com.sg)


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