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Just Eat Takeaway to acquire Grubhub for $7.3B
- vikramkr 6y agoI read an article with some details from the Uber side on why that deal fell through. I never thought I'd read an article where Uber seemed to be on the ethical right side of things... "Uber also believed it would would need to stop several undesirable business practices from Grubhub, including phone charges and cybersquatting, or buying domain names with the intent to profit from them. Grubhub has denied cybersquatting in the past. " https://www.cnbc.com/2020/06/10/uber-exasperated-with-grubhub-sale-process-as-deal-slips-away.html https://www.cnbc.com/2020/06/10/uber-exasperated-with-grubhu...
- ErikHuisman 6y agoAah thuisbezorgd/takeaway does squad domains so grubhub will fit right in.
- markus92 6y agoYou got a source for that or some other reading material? Never witnessed it myself so just curious.
- simonmales 6y agoDefinitely seen in the German market Takeaway buying tonnes of domains.
- Avalaxy 6y agoI think this is an example: https://www.afhaalrestaurantpikantochicken-rotterdam.nl/ https://www.afhaalrestaurantpikantochicken-rotterdam.nl/ Its a place that's on thuisbezorgd but has no own website. Just this shady ridiculously long URL that is an exact copy of the thuisbezorgd page, with a thuisbezorgd banner on it. If we do a whois on the URL, the registrar is TAKEAWAY.COM (so thuisbezorgd) who happens to have 90,237 more domains: https://whois.domaintools.com/afhaalrestaurantpikantochicken-rotterdam.nl https://whois.domaintools.com/afhaalrestaurantpikantochicken....
- mcv 6y agoThey do? I didn't know that. I only know them from their Dutch branch Thuisbezorgd, which seems fairly decent, and has contracts with connected restaurants. Quite recently they've been under attack for abusing their near-monopoly (they do have Deliveroo and Uber Eats as competitors, as well many independent restaurants; many connected restaurants also have their own site) by raising their margins, putting pressure on restaurants. GrubHub sounds like the worst of the worst, so I was quite surprised to learn they were bought by Thuisbezorgd's parent.
- ErikHuisman 6y agoI only got anecdotal evidence. Sometimes i just google the name of a restaurant i want to order. Most of the times the results are: - ad: order X on thuisbezorgd - google widget about X - 1) squated domain with thuisbezorgd order page for X - 2) real domain of restaurant X
- Avalaxy 6y agoI think this is an example: https://www.afhaalrestaurantpikantochicken-rotterdam.nl/ https://www.afhaalrestaurantpikantochicken-rotterdam.nl/ Its a place that's on thuisbezorgd but has no own website. Just this shady ridiculously long URL that is an exact copy of the thuisbezorgd page, with a thuisbezorgd banner on it. If we do a whois on the URL, the registrar is TAKEAWAY.COM (so thuisbezorgd) who happens to have 90,237 more domains: https://whois.domaintools.com/afhaalrestaurantpikantochicken-rotterdam.nl https://whois.domaintools.com/afhaalrestaurantpikantochicken....
- askafriend 6y agoI bet GrubHub realizes it can get an even bigger payday later on when either Uber or DoodDash will need to acquire it. That's probably why they didn't want to consolidate with Uber immediately.
- koolba 6y ago“DoodDash” sounds like the name of the company after a merger with Grindr.
- crazygringo 6y agoGenuine question: why? I completely understand acquisitions that create value by providing economies of scale, monopoly power or network benefits, or diversify or complement a company's activities. But for a European market leader to buy an American market leader in what is ultimately an extremely local business... I see no real added benefit here. Few further economies of scale when you're already at continent-size for an ultimately "local" business, no monopoly or network benefits, and zero diversification. If this were manufacturing or retail then benefits are pretty obvious. But in this case, what am I missing? How on earth does this justify a 27 percent premium on GrubHub? It is purely a strategic defensive move to prevent Uber from buying it, and nothing more?
- saos 6y agoCompetition... monoply. Ubers Eats and Deliveroo have massive control. I think what many of the players are concerned about is Amazon entering the market via Deliveroo investment of $500m. https://www.gov.uk/cma-cases/amazon-deliveroo-merger-inquiry https://www.gov.uk/cma-cases/amazon-deliveroo-merger-inquiry
- JAlexoid 6y agoFYI Amazon already left the "hot" food delivery market. Amazon Restaurants was killed
- saos 6y agoYes, I did mention that in my own comment. I can only imagine Amazon are desperate to re-enter... I mean they seem set-up for this to happen eg infrastructure. Hence, why they are investing in Deliveroo, who are also setup pretty well. In fact I reckon the investment in Deliveroo and potential acquisition of Grubhub by Uber is what shook Takeaway.com (Just Eat) into this panic buy haha
- allworknoplay 6y ago* They may expect to achieve efficiencies with the business that will throw off more profit. * They may be protecting their own territory from grubhub's eventual entry. * They may simply have extra cash (or stock purchasing power) and want to use it to secure greater future cash flows rather than just sit on it. * They may feel more able to enter other markets via grubhub than their own brand/company. etc. Edit: Also, acquisition premia reflect benefits that derive from taking a business business private, including control over the timing of dividends, no worries about control/governance, a larger-than-expected reduction in hard costs of compliance, and other factors, in addition to some of the benefits I mentioned above.
- tim_sw 6y agoThis story is not yet over. There’s a decent chance that Doordash or Uber will make a bid.
- allworknoplay 6y agoUber did make a bid, and these two signed an agreement. This is in the first paragraph of the article ;)
- tim_sw 6y agoYup, I meant that they will put in a higher bid, or they might buy this new combination. This area is strategically important for them, and if you’ve read previous merger/M&A stories or books about them, this seems just like the first salvo.
- zXuPh94rt 6y agoJust Eat is danish not Dutch. Close. It's somewhere in Europe.
- RcouF1uZ4gsC 6y agoGell-Mann Amnesia affect.
- anamexis 6y agoIt seems they were basing that off of Takeaway.com, one half of the Just Eat Takeaway merger. And now the company is based out of the UK, so who knows why they went with Dutch.
- guillermin 6y agoActually, Just Eat was originally Danish and moved to UK in 2005, so it is British. In any case, the company they are talking about is "Just Eat Takeaway", which is the result of the purchase by Dutch company Takeaway.com of British company Just Eat in February 2020, so it is in fact Dutch.
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- ThomPete 6y agoJust eat was originally Danish not Dutch
- jbj 6y agoJust Eat was originally Danish. Takeaway was originally Dutch. Just Eat Takeaway is a Dutch company listed on London Stock Exchange since February 2020. https://en.wikipedia.org/wiki/Just_Eat_Takeaway https://en.wikipedia.org/wiki/Just_Eat_Takeaway
- godzillabrennus 6y agoThe value is in the transaction data they now capture with their own ordering and delivery service. Transaction data is the gold standard in building personalized marketing/ads.
- tybit 6y agoIt looks like Just Eat currently has a market cap of 5.233B pounds, 6.645B USD. How does an all stock acquisition of 7.3B USD work in this case? Is this done via issuing more than an extra 100% of stock on the expectation the new asset will counteract the dilution to keep the stock price similar?
- hayksaakian 6y ago1 example: they could take on debt from a Bank to make the purchase for example. "Just Eat Takeaway was created this year through the $7.8 billion combination of two of the earliest participants in Europe’s food-delivery market, Just Eat and Takeaway.com. It has been fighting competition in Europe from Uber Eats and Deliveroo, a London-based company whose investors include Amazon. Mr. Groen, a Dutch entrepreneur, founded Takeaway.com in 2000 when he was a student frustrated with the challenge of ordering pizza online. He took Takeaway.com public in 2016, and now has a net worth of more than $1.5 billion, according to Forbes. In addition to the deals for Grubhub and Just Eat, Mr. Groen bought the German portion of Delivery Hero’s business for about $1 billion in 2018." They've been aggressively acquiring competitors for years, so this seems par for the course.
- grayfaced 6y agoI don't get it. Why would a bank loan billions to a company losing money, so they can acquire another company losing money? The bank takes all the risk for little return. At what point should the bank just become an investor.
- jessaustin 6y agoWell probably the only "bank" involved was an investment bank. Typically they would issue bonds rather than taking out a mortgage. Some investors like the risk available with such corporate bonds. Although this may not be a LBO situation, selling junk bonds is often the way that PE firms steal everything from firms they "buy". I have no idea how the "all-stock" claims jive with selling bonds. I suppose the buyer could just issue more of its own stock, if the numbers don't add up. [EDIT:] This last maneuver seems more plausible if the buyer itself was previously a LBO target and the PE dudes haven't totally drained it yet.
- adrr 6y agoSo it's an all stock deal and it seems Grubhub purchase will be greater than the market cap of Just Eat Takeway. How does that work? What about control of the board? Also seems strange that a $500mm revenue company is acquiring a $1.6bb company. All the financials for just eats are terrible. I am so confused on this acquisition and why shareholders approved.
- alfalfasprout 6y agoIs it just me or are all these delivery apps pretty much the same thing, just with different restaurants? In SF at least Grubhub tends to have some of the more "typical delivery" choices (pizza, chinese food, thai) and decent customer service, Doordash seems to have the most variety but the dashers take their merry time on their way to you (and customer service is nonexistent), Uber Eats is somewhere in between grubhub and doordash in selection and has nonexistent customer service (but at least give you a refund if something goes wrong), caviar has a smaller selection but a lot of unique/higher end things (along with a terrible app but OK customer service), and Tock is targeting the "high end at home" market. There's also postmates which seems more expensive than the others for the same exact restaurants (but seems to have more traction in LA). At the end of the day, the search is really bad (clicking the healthy category includes deep dish pizza and fried chicken on almost all the apps), the drivers aren't adequately compensated so the customer experience is bad (your driver might make 4 stops on the way to you and your food will be cold), and the apps are slow and buggy. I'm convinced that significant improvements in search, recommendations, adding proper review support, and finding a way to not piss of restaurants in the process will determine the winner in this battle. The differences in selection are too small (in SF caviar which is owned by doordash and tock being the exceptions) to really crown a winner on that front.
- VWWHFSfQ 6y agoI prefer Grubhub/Seamless in NYC. They're typically on bicycles or scooters and will bring the order up to your apartment door. Uber Eats people usually want you to come down outside so they don't have to double-park. I'm not giving you a $10 delivery tip to drive my Five Guys order eight blocks.. You gotta get out and come up the stairs to my door.
- replyguy912 6y agoor you could, ya know, walk 8 blocks and keep the restaurant in business, but hey, we all have our limits.
- greeniron 6y ago
- foxes 6y agoAren't all these delivery businesses living in a false vacuum? It seems like a lot of these companies are basically a giant multivariate ponzi scheme.
- nsxwolf 6y agoI can do the first part but I don’t think I can come up with the $7.3B
- saos 6y agoWow. I thought Uber were going for it? The food delivery market share war is really interesting. For folks in the UK. The Competition Markets and Authority (CMA) delayed a decision on whether Amazon could invest $500m in Deliveroo as of yesterday[1]. Deliveroo are more established in Europe but I can now see the CMA approving Amazon investment into Deliveroo[2]. Why? Just Eat provided evidence to the CMA recently on why the Amazon investment into Deliveroo could be problematic [3]. Just Eat then go off to spend a $7b to secure the U.S market ahaha. In my opinion Takeaway.com/Just Eat are now scrambling for marketshare. Amazon tried to enter the food delivery market back in 2014-16 and they had every right to![4]. But, competition pushed them out in my opinion. So now Amazon are wanting to re-enter via investment into Deliveroo. It's very smart move because Deliveroo service is pretty amazing already. [1] Amazon/Deliveroo delayed decision: https://uk.reuters.com/article/deliveroo-ma-amazon/uk-regulator-gets-more-time-for-final-ruling-on-amazons-deliveroo-deal-idUKL8N2DH4CB https://uk.reuters.com/article/deliveroo-ma-amazon/uk-regula... [2] Amazon/Deliveroo CMA inquiry: https://www.gov.uk/cma-cases/amazon-deliveroo-merger-inquiry https://www.gov.uk/cma-cases/amazon-deliveroo-merger-inquiry [3] Just Eat CMA inquiry response: https://assets.publishing.service.gov.uk/media/5ec27cc1e90e071e31153684/Just_Eat_Takeaway.com_N.V_180520.pdf https://assets.publishing.service.gov.uk/media/5ec27cc1e90e0... [4] Amazon close food delivery business: https://www.engadget.com/2018-11-26-amazon-closes-restaurant-delivery-uk.html https://www.engadget.com/2018-11-26-amazon-closes-restaurant...
- 00deadbeef 6y agoJust Eat are getting too big. They destroyed Hungry House by buying it a few years ago. This was before Deliveroo and Uber Eats were known to most people. Seems like Just Eat are afraid of competition.
- saos 6y agoI was not aware of Hungry House. but you're right! They purchased them too [1]. Yeah it feels like a "screw it" lets do this type of move from Takeaway.com/Just Eat. From my research it looks like Just Eat are threatened by competition and re-entry into the market from Amazon. $500m investment could really push Deliveroo on. I see similaries between Deliveroo and Amazon in wanting to provide very quick delivery service. https://www.gov.uk/cma-cases/just-eat-hungryhouse-merger-inquiry https://www.gov.uk/cma-cases/just-eat-hungryhouse-merger-inq...
- dep_b 6y agoI hate Just Eat in my country. For the life I couldn't get them to put VAT on my receipt. Stopped ordering food almost completely because I was tired of something simple like that failing over and over. Now they're slowly turning into a monopoly, can't imagine how bad their service will get at that point.
- jbj 6y agoI am a bit confused by the legal structure of this business: Article states that just eat is dutch, but it is not based in the Netherlands. It is a UK company that used to be based in Denmark. According to Wikipedia it recently merged with Takeaway but is still operating as a subsidary with its own brand. https://en.wikipedia.org/wiki/Just_Eat https://en.wikipedia.org/wiki/Just_Eat
- pt3530 6y agoJust eat was acquired by Takeaway which is a Dutch company. From your link "It was listed on the London Stock Exchange until it was acquired by Takeaway.com in February 2020."
- gnicholas 6y agoIn general, confusion around this subject stems from the fact that some jurisdictions focus on place of incorporation, whereas others look to the location of the principle place of business. So you can have a company that is incorporated in the Netherlands, but which has its principal place of business in London. Depending on who you’re talking to, this is either a Dutch business or a British business. A maneuver like this would often be done for tax purposes.
- bluehatbrit 6y agoJust Eat was a UK based company which was public on the London Stock Exchange (LSE). It was then bought out by Takeaway.com (Thuisbezorgd.nl) based in the Netherlands and the company is now on the LSE (in the FTSE 100) and Euronext Amsterdam. Just Eat was originally founded in Denmark but moved to the UK Just Eat was founded in 2000 in Denmark, then moved to the UK in 2005. It floated on the London Stock Exchange in 2014 and acquired by Takeaway.com (Thuisbezorgd.nl). It's now Just Eat Takeaway.com and trades on the LSE and Euronext. The head office is in Amsterdam now as well, but the whole UK engineering team is still in London and Bristol in the UK. So the parent company is Just Eat Takeaway.com but then it's Just Eat in the UK (and much of Europe), Takeaway.com in the NL (well, Thuisbezorgd.nl), and a few other names around the globe like Menulog (AU/NZ), and Skip the Dishes (CA).
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- dom96 6y agoMy question: how is this allowed? Won't this create a massive monopoly? I and many others had the same concerns when Just eat bought Hungry House. Now we've got Deliveroo and Uber Eats too, but how can a smaller player survive with these behemoths?
- mcv 6y ago> "how can a smaller player survive with these behemoths?" Make sure your customers know you, and know you deal fairly.
- saos 6y ago> Won't this create a massive monopoly? They wish. Just Eat are just using Grubhub as a way to enter US market. But, theres already too many players in US. Doordash, Postmate, Grubhub, Uber Eats
- Traster 6y agoI had a real laugh when Dara Khosrowshahi tried to argue that the "market" uber eats is competing in should include home grocery shopping so that he could claim that they're competing against Amazon and Walmart, despite Amazon and Walmart literally not offering a competitive alternative to 99% of Uber Eats business.
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- AgloeDreams 6y agoLol... These companies do realize that these numbers are incredibly not locked in right? Like Grubhub's business could be taken in a week by any other app because they don't own the endpoint, just the middleman. Sure they have some exclusive deals but this is an incredibly inflated value for what is effectively a API connection and little actual market ownership.
- gridlockd 6y ago...in stock. If you can give away $7 billion in stock, clearly your company must be worth at least that much money, right? This is a bullshit deal to drive up bullshit valuations for bullshit business models looking for dumb money.
- obibring 6y agoMarket consolidation would limit competition and hurt consumers so I'm glad they were purchased by an external player. But local restaurants are still hurting from exorbitant fees and something needs to be done to help. Shameless plug: I'm working on a chrome extension that compares the price of your order across delivery services to get you the best price. We'll soon be linking to restaurants' websites to let people order direct and save on fees. For those interested, link is here: https://platerapp.app.link/1VRKKwGAe7 https://platerapp.app.link/1VRKKwGAe7
- nogahelena 6y agoi love this idea! anything that tilts the power back into the hands of local businesses is def needed during times like this.
- omerg 6y agolove this :) is there a mobile app in the works?
- ngoldberg 6y agoI totally agree. By the way, I checked out the extension you are working on and it’s amazing. This is a no brainer solution and I expect it to go viral. Kudos on thinking about it and sharing it! Exciting...!
- assafe 6y agoAmazing app just saved $18! Thank you for this!!