Just Eat Takeaway Makes Strategic Sale of Grubhub
In a surprising move, Just Eat Takeaway has announced a groundbreaking deal to sell Grubhub for a significant enterprise value of $650 million. This deal comes years after the initial acquisition of the US-based business for billions of dollars during the peak of the pandemic-induced food delivery craze, propelling shares of Just Eat Takeaway up by an impressive 20 percent.
Here are the key points surrounding this momentous sale:
- Just Eat Takeaway has finalized an agreement with Wonder Group to offload Grubhub, a subsidiary it acquired in 2021 for a substantial $7.3 billion.
- The company expects to receive net proceeds of up to $50 million from this sale, after accounting for customary adjustments.
- Just Eat has faced challenges in divesting the Grubhub unit since 2022, bowing to pressures from investors seeking asset sales. This struggle has resulted in a series of impairment charges for previous acquisitions, including the US subsidiary.
- Jitse Groen, the CEO of Just Eat Takeaway, believes that the sale of Grubhub to Wonder will strengthen the company’s cash generation abilities and fuel its growth trajectory.
Additionally, the deal involves the transfer of Grubhub along with its $500 million of senior notes, sparking a significant 20 percent jump in Just Eat Takeaway’s shares during Wednesday’s morning trading session. The company’s decision to write down the value of Grubhub by €3 billion in 2022, followed by a €4.6 billion impairment charge last year, has been a topic of interest.
The recent 11 percent decline in orders and gross transaction value in North America in constant currency has raised concerns, but the enterprise value of the deal is seen as a positive sign for the company’s future prospects. Grubhub’s market share of 8 percent in the US, compared to competitors like DoorDash and Uber Eats, has played a critical role in shaping this strategic decision.
In conclusion, the sale of Grubhub to Wonder Group marks a significant milestone for the future of both companies. As Just Eat Takeaway navigates through this transaction, analysts and investors will undoubtedly monitor the impact of this deal on the company’s performance and growth trajectory going forward. Anticipated to be completed in the first quarter of 2025, pending regulatory approvals, this sale represents a pivotal moment in the evolving landscape of the food delivery industry.
