Uber’s Dutch Rival for Grubhub Risks Indigestion
The Dutch food delivery giant is doing its second big deal in quick succession. It’s a lot to digest.
Just Eat Takeaway will have a harder time making a Grubhub deal palatable than Uber Eats could.
Photographer: Andrew Harrer/BloombergFor Uber Technologies Inc., the logic of gobbling up food-delivery rival Grubhub Inc. seemed pretty straightforward: reduce the number of competitors, making it easier to charge higher prices to diners and earn more commission from restaurants. The rationale isn’t so clear cut for Dutch deliverer Just Eat Takeaway.com NV, which leapfrogged Uber to announce on Wednesday that it was acquiring Grubhub in a $7.3 billion all-share deal.
Unlike Uber, Just Eat Takeaway isn’t present in the U.S., where the main rivals are Grubhub, Uber Eats and DoorDash Inc., with the startup Postmates Inc. a distant fourth. That highly competitive landscape won’t change with an overseas purchase of Grubhub, which may explain why investors initially found the idea of such a deal unpalatable. Just Eat Takeaway shares fell as much 19% after news of the potential tie-up was first reported by the Wall Street Journal. That’s equivalent to some 2 billion euros ($2.3 billion) of value.