Just Eat Takeaway has agreed to sell its U.S.-based meal delivery unit, Grubhub, to food delivery startup Wonder for $650 million, marking a steep loss for the European company after it acquired the platform for $7.3 billion in 2020. The deal, expected to close in the first quarter of 2025 pending regulatory approval, sent shares of the Amsterdam-listed Just Eat soaring by 20% in early trading on Wednesday. The transaction highlights Just Eat's effort to exit the U.S. market and focus on its European operations.
Wonder, a delivery company led by former Walmart e-commerce executive Marc Lore, will acquire Grubhub's enterprise value, which includes $500 million in senior notes and $150 million in cash. The acquisition will help Wonder enhance its food delivery capabilities as it plans to create a "super app for mealtime," according to Lore. The company, known for its innovative food truck and food hall model that features meals crafted by renowned chefs like Bobby Flay, aims to integrate Grubhub's technology and restaurant partners into its platform.
Grubhub, once a dominant player in the U.S. meal delivery market, faced increasing competition and regulatory hurdles in recent years. Just Eat's acquisition of the platform was initially seen as a strategic move to capitalize on the pandemic-driven surge in food delivery. However, the company struggled with slowing growth, mounting losses, and legal battles over delivery fee caps in major markets like New York City. These challenges, coupled with intense competition from Uber Eats and DoorDash, diminished Grubhub's value.
"Just Eat Takeaway is at last putting an end to its disastrous U.S. journey," remarked Bryan Garnier analyst Clement Genelot, noting that the company effectively destroyed over $7 billion in shareholder value through its U.S. expansion. Just Eat CEO Jitse Groen acknowledged earlier this year that the U.S. market presented a challenging environment for mergers and acquisitions, citing regulatory hurdles and fee caps that cost the group roughly $100 million annually.
Despite the financial hit, Just Eat sees the sale as a step toward stabilizing its balance sheet. The company emphasized that the transaction would not materially impact its full-year guidance, nor would it leave it with any major liabilities related to Grubhub. Analysts at JPMorgan had previously estimated a valuation of approximately $1.2 billion for Grubhub but still viewed the long-awaited deal as a positive development, even at a lower price point.
The transaction also sheds light on the broader challenges faced by the meal delivery industry, which experienced explosive growth during the pandemic but has since grappled with slowing demand and intense competition. Wonder's acquisition of Grubhub reflects a strategic shift, with Lore's company seeking to differentiate itself through a curated dining experience and expanded offerings, including groceries and meal kits through its Blue Apron brand.
"By acquiring Grubhub, Wonder aims to create a comprehensive platform that addresses all aspects of mealtime," Lore said in a statement. The integration will also enable third-party deliveries from Wonder's 28 locations in the Northeastern U.S., with plans for further expansion.
The sale marks the end of Just Eat's tumultuous foray into the U.S. market. The company, which operates in 18 countries excluding the U.S., has already exited markets like New Zealand and France this year. Analysts suggest that Just Eat may need to divest further from other regions, such as Australia and Canada, to close the valuation gap with European competitors.
