Amazon (AMZN, $114.33) has shown that it loves to grab a takeout just as much as anyone. The online retailer has taken a 2% stake in Just Eat Takeaway.com’s (JTKWY, $3.20) struggling US subsidiary, Gruhub, giving Prime members access to the service for a year. Just Eat, Europe’s largest meal delivery company, has watched its stock tumble 70% this year. Shareholders including Blackrock Capital, have previously demanded it sell Grubhub or find a partner. JET purchased Grubhub for $5.8 billion last year.
Amazon has an initial option to take a 2% stake in Grubhub, which could climb to 15% if certain performance conditions are met. The deal could give Grubhub a much-needed boost. The Chicago-based company was the U.S. market share leader as recently as January 2019, when it controlled 31% of food delivery sales. JPMorgan analysts claimed that the new deal with Amazon is likely to bring new customers and strengthen the firm’s position in the US.
In a statement, Grubhub CEO Adam DeWitt said he’s confident the offering will expose many new diners to Grubhub delivery. Food delivery company DoorDash (DASH, $69.36) shares sank on Wednesday The San Francisco-based startup tumbled as much as 11% in New York trading, taking the stock down more than 70% from the highs touched in November.