Grubhub, following failed talks with Uber, is now planning to merge with European food delivery service Just Eat

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grubhub delivery bike NEW YORK, NEW YORK - MAY 18: A Grubhub delivery person rides a bicycle on 42nd street during the coronavirus pandemic on May 18, 2020 in New York City. COVID-19 has spread to most countries around the world, claiming over 320,000 lives with over 4.8 million infections reported. (Photo by Noam Galai/Getty Images)
Grubhub is planning to merge with European food delivery service Just Eat.

Noam Galai/Getty Images

Grubhub is looking to merge with Just Eat, one of Europe's largest food delivery companies, according to a press release from Just Eat on Wednesday.

The new company would "become the world's largest online food delivery company outside of China," Just Eat said in its statement.

Under the terms of the stock-swap deal, Just Eat is offering roughly 0.67 of its shares for every Grubhub share for an implied value of $75.15 per share, or $7.3 billion based on Tuesday's closing price, according to the statement.

Additionally, Grubhub would receive two seats on the combined company's board and CEO Matt Maloney would be brought on to run its North America operations.

Shares of Grubhub surged as much as 9% in after hours trading Wednesday following news of the proposed deal.

The announcement comes after Uber abandoned talks to acquire Grubhub, which CNBC reported was due to growing antitrust scrutiny from US lawmakers.

A source close to the deal also told Business Insider that Uber had grown frustrated with Grubhub executives over a number of issues, including their handling of merger talks, business practices that could be seen as questionable, and concerns that the company wouldn't be able to withstand a months-long regulatory review process.

"Like ridesharing, the food delivery industry will need consolidation in order to reach its full potential for consumers and restaurants. That doesn't mean we are interested in doing any deal, at any price, with any player," an Uber spokesperson told Business Insider.

Grubhub has repeatedly drawn the ire of restaurant owners and lawmakers, who have accused the company of overcharging and erroneously charging restaurants, strong-arming owners into sticking with Grubhub in order to access coronavirus fee-relief, and funneling sales to itself through copyright infringement.

Grubhub did not immediately respond to a request for comment on this story.

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