(Bloomberg) — Amazon.com Inc. agreed to take a stake in Just Eat Takeaway.com NV’s Grubhub and will offer its US Prime users a one-year membership to the food delivery service.
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Amazon will receive options for a 2% stake in Grubhub and will have the opportunity to increase the holding to 15%, Just Eat said in a statement on Wednesday. Amazon’s stake is in the form of warrants, which will vest depending on how well the partnership performs and how many new customers it attracts.
Just Eat shares jumped as much as 16% in Amsterdam on Wednesday, the biggest intraday gain since 2018. The stock has declined 68% this year.
The membership agreement will renew every year unless Amazon or Grubhub terminates it, and Just Eat will continue to explore a full or partial sale of the US business, Just Eat said. The Dutch company announced plans to find an investor or bidder for the US business in April, less than a year after buying it for $7.3 billion.
Just Eat Chief Executive Officer Jitse Groen is under pressure to find a way to reignite growth after a slew of competitors took market share and restaurants that had been closed during the Covid-19 lockdowns reopened to diners.
Read More: Just Eat Weighs Grubhub Sale in Tough Food Delivery Market
In a presentation to analysts and investors in October, Groen laid out a strategy to grow in the US, targeting suburbs in key markets and trialling mini warehouses in New York for faster order fulfillment.
The Amazon deal will be neutral for Grubhub’s financial results this year and add to cash flow and earnings starting in 2023, Just Eat said in the statement.
(Updates with share jump in third paragraph)
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