GrubHub to merge with Europe’s largest food delivery service in $7.3 billion deal.

GrubHub European

European food delivery giant Just Eat is in advanced talks to buy U.S. rival GrubHub for $7.3 billion, grabbing a share of the surging U.S. market and creating the world’s biggest food ordering service outside China.

Just Eat was itself acquired by Amsterdam-based, a $7.7 billion deal that was cleared by regulators in April following an investigation by the U.K. Competition and Markets Authority.

The deal comes after Uber announced on Wednesday it had pulled out of talks to merge with GrubHub, amid scrutiny from competition regulators. That deal would have combined the two of the biggest food delivery services in the U.S..

The takeover coincides with a surge in demand for food ordering and delivery services prompted by the coronavirus pandemic that has kept millions of people at home.

The takeover is set to be completed early next year, as it needs to be approved by regulators and both sets of shareholders.

The coronavirus pandemic has pushed the need for consolidation within the food delivery industry into sharp focus. Analysts say that the mostly unprofitable food delivery firms need to consolidate in order to survive but the surge of at-home orders during the pandemic has raised concerns over competition, and some unpalatable tactics that impact restaurants. A tie between Uber Eats and Grubhub would have created a business with a 45% share of the food delivery market in the U.S, catapulting the firms into a position to rival Doordash’s 45% market share. New York City Mayor Bill de Blasio’s move to cap delivery commissions at 10% was an early signal of regulators frustration following a drumbeat of stories over the lockdown about Grubhub’s move to set up shadow websites for restaurants, and fee-charging redirect phone numbers.

The CMA is set to make a final ruling on its investigation into Amazon’s plan to buy a minority stake in London-based food delivery firm Deliveroo. The deal was provisionally cleared in April, with the CMA saying the pandemic was damaging Deliveroo’s revenues and the company could go bust without investment from the e-commerce giant. A final ruling is now due on August 6.

600 million. That’s how many annual food orders the combined company is expected to fulfill a year, with a total of 70 million customers.

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