Amazon agrees to invest in Just Eat’s Grubhub delivery service


Amazon is buying a 2% stake in Just Eat Takeaway.com’s delivery service, Grubhub, and will offer the service to Amazon Prime members for one year.

Just Eat Takeaway has seen its shares drop 70% this year as shareholders ask it to sell or find a partner for Grubhub. Just Eat bought Grubhub for $5.8 billion in stock last year.

The GrubHub Inc. app is seen in the Apple Inc. App Store on an iPhone in Washington, DC, U.S., Saturday, February 4, 2017. (Andrew Harrer/Bloomberg via Getty Images/Getty Images)

As part of the deal, Amazon customers will be offered free shipping on orders worth $12 or more in cities where Grubhub operates. The deal with Just Eat was announced Wednesday as part of Amazon’s “Prime Day” promotion in July.

The deal should give Grubhub a boost as it struggles to keep up with competitors. Grubhub lost shares to Doordash and Uber Eats.

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Amazon will receive warrants representing 2% of Grubhub shares as part of the deal, and an additional 13% of shares provided the arrangement helps Grubhub attract enough customers.

“The deal is expected to expand Grubhub+ membership, while being neutral to Grubhub’s earnings and cash flow in 2022, and accretive to Grubhub’s earnings and cash flow from 2023” , Just Eat Takeaway said in a statement.

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Amazon

Amazon customers will receive free shipping on orders worth $12 or more in cities where Grubhub operates. (Reuters/Carl Recine/Reuters Photos)

Just Eat said Grubhub’s gross assets were worth $9.3 billion at the end of last year.

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Reuters contributed to this report.

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