Reuters
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Just Eat Takeaway, Europe’s largest food delivery company, said on Wednesday it had reached a deal to sell its U.S. subsidiary Grubhub to Wonder for $650 million, sending its shares up 20% in early trading.

The Amsterdam-listed company has since been seeking to offload Chicago-based Grubhub. from 2022after acquiring it in 2020 in a $7.3 billion deal amid a pandemic-driven boom in delivery services — a process that has been hampered by slowing growth, high taxes and a fee capping issue in New York.

“Just Eat Takeaway finally puts an end to its disastrous run in the United States,” said Clement Genelot, analyst at Bryan Garnier, noting that the group had destroyed more than $7 billion in shareholder value there.

Grubhub’s enterprise value of $650 million includes $500 million in senior notes and $150 million in cash, Wonder said in a statement.

Wonder is a food delivery startup led by former Walmart executive Marc Lore.

Advanced talks between the two companies were the first reported by the Wall Street Journal on Tuesday.

Just Eat CEO Jitse Groen had in February said The M&A environment has not been easy in the United States, where fee caps cost the group some $100 million a year.

Grubhub and its American peers DoorDash and Uber Eats are in a legal battle with New York City over a law capping the amount they can charge restaurants for meal delivery.

JPMorgan said in a note that it had argued for a valuation of around $1.2 billion for Grubhub in the past, but that the market would view the long-awaited deal as positive even at a lower valuation .

The transaction is expected to be completed in the first quarter of 2025 and Just Eat said it would have no impact on its business. orientation for the whole year and that it retains no material liability associated with Grubhub.

However, analysts said Just Eat may also have to exit other markets to close the valuation gap with its European peers, citing Australia and Canada as options.

Outside the United States, Just Eat is present in 18 countries. He left New Zealand and France earlier this year.

If the gains hold, Just Eat shares will see their biggest daily rise since August 2022, erasing the bulk of their annual losses which stood at 18.1% as of Tuesday’s close.