Anglo-Dutch meal delivery firm Just Eat Takeaway.com agreed to acquire US company Grubhub for $7.3 billion (roughly Rs. 55,341 crores) to form the world's largest online food delivery company outside of China, they announced Wednesday. The deal comes as both companies have experienced strong growth in the wake of the coronavirus pandemic from customers stuck at home who have boosted digital orders.
The combined company will have a major presence in four key markets -- the US, Britain, Germany, and the Netherlands -- and position the enterprise for greater growth in the US, they said in a news release.
Grubhub has been effective in navigating the "fragmented" US market -- but "the US remains an underpenetrated market" that is "nowhere near its end-state," the companies said.
"Just Eat Takeaway.com will prioritise sustainable growth over profits, as this has been a major driver of its strategy and success in Europe," the press release said.
Under the Just Eat Takeaway.com deal, which must be approved by shareholders of both companies, investors in Grubhub will receive 0.6710 of Just Eat Takeaway shares for each Grubhub share.
That values Grubhub at $75.15 (roughly Rs. 5,690) a share, compared with a closing price Wednesday of $59.05 (roughly Rs. 4,470).
Shares of Grubhub surged 5.9 percent to $62.50 (roughly Rs. 4,730) in after-hours trading Wednesday.
Just Eat Takeaway, which had confirmed earlier its interest in the deal, suffered a 12.6 percent drop in shares to EUR 85.88 (roughly Rs. 7,380) in Wednesday's session in Amsterdam.
Both companies have prospered in the wake of the COVID-19 upheaval, with Just Eat Takeaway seeing orders bounce by 41 percent in April and May com[pared with the year-ago period.
At Grubhub, the increase during this period has been 28 percent.
OnePlus 8 vs Mi 10 5G: Which Is the Best 'Value Flagship' Phone in India? We discussed this on Orbital, our weekly technology podcast, which you can subscribe to via Apple Podcasts or RSS, download the episode, or just hit the play button below.