Questions Swirl Around Just Eat’s Acquisition Of Grubhub

As the food delivery industry reckons with a post-lockdown economy, Just Eat Takeaway is reportedly considering a sale of Grubhub at a considerable markdown in value.

According to a report from the Sunday Times, Just Eat Takeaway could wipe around $6 billion off the value of the US company that it acquired for $7.3 billion in 2020. Reports of interest in selling the company first emerged late last month.

Just Eat Takeaway declined to comment.

That deal was announced in the early months of the pandemic when food delivery services like Just Eat and rivals Uber Eats and Doordash enjoyed a boom in user activity due to dine-in closures and lockdown restrictions.

As pandemic restrictions have subsided in much of the world, companies in the space have seen consumers readjust.

In its latest trading update for the first quarter of 2022, Just Eat reported a slight downtick in order volumes, more so in its North American business. For the full year of 2021, it booked revenues of €5.3 billion with an adjusted EBITDA loss of €350 million.

In Europe, the company has pulled out of some markets like Portugal and Norway.

However it is the US business, through its acquisition of Grubhub, that has garnered the most scrutiny from investors.

Shareholder Cat Rock Capital publicly chastised the acquisition last month.

“JET [Just Eat Takeaway] management made a capital allocation mistake when it decided to buy Grubhub in June 2020 with minimal synergies only two months after tripling the Company’s size with the Just Eat acquisition,” it said in a letter, also referring the merger of Just Eat and Takeaway, which formed the current company.

Pressure mounts on Just Eat Takeaway as the broader food and grocery delivery business moves through a period of turbulence.

Last week, three major European grocery delivery start-ups announced lay-offs at their companies in response to the current global economic situation and inflation, after two years of rapid growth and VC investment during the pandemic.


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