Amazon makes Grubhub deal to give Prime members fee-free food
Amazon has secured the right to buy a 2 per cent stake in Just Eat Takeaway.com’s Grubhub and will offer no-fee access to the service for a year to US Prime members, hoping to boost subscriptions with a renewed push into meal delivery.
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Announced ahead of Amazon’s July “Prime Day” marketing blitz starting Tuesday, the deal lets the online retailer’s loyalty club members use Grubhub without delivery fees on orders over US$12 in more than 4,000 US cities.
Shares in Just Eat Takeaway rose more than 15 per cent to €15.86 in Amsterdam trading. The deal is a major relief for Europe’s largest meals company, whose stock had fallen 70 per cent this year.
Shareholders have demanded it sell or find a partner for Grubhub, which it bought last year for US$5.8 billion. Demand has waned since the height of the pandemic, and it has lost market share to Doordash and Uber Eats.
Amazon will receive warrants representing 2 per cent of Grubhub’s shares, and an additional 13 per cent of shares conditional on the deal bringing Grubhub enough customers.
Amazon’s stock rose more than 1 per cent, while Uber shares fell about 4 per cent and Doordash tumbled about 7 per cent. Just Eat Takeaway specified in a statement it continues to “explore the partial or full sale of Grubhub,” though there is no certainty any deal will be reached.
In a note on the Amazon deal, analysts from JPMorgan said it would bring new customers and strengthen Grubhub’s position in the United States, comparable to a partnership Amazon has in Britain with Just Eat rival Deliveroo.