Amazon.com Inc. is getting a small piece of Grubhub Inc. in a deal that will give Prime members a free membership to Grubhub+.
Just Eat Takeaway.com, Grubhub's parent company, said Wednesday that Amazon has agreed to take a 2% stake in the Chicago-based food delivery company in a commercial agreement that will give its Prime members a free, one-year Grubhub+ membership that includes $0 delivery fees. Under the agreement, Amazon (Nasdaq: AMZN) could increase its Grubhub stake to 15% based on performance conditions, including how many new customers it drives.
Just Eat said it is still actively exploring a full or partial sale of its Grubhub business, which the company first revealed in April.
The deal between Grubhub and Amazon will renew annually unless terminated by either company, Just Eat said, adding that the deal is expected to expand Grubhub+'s membership base.
"Amazon has redefined convenience with Prime, and we’re confident this offering will expose many new diners to the value of Grubhub+ while driving more business to our restaurant partners and drivers," said Grubhub CEO Adam DeWitt in a statement.
Just Eat finalized its acquisition of Grubhub in June of 2021. The deal, valued at $7.3 billion, created the largest online food delivery company outside of China and gave Just Eat Takeaway its first U.S. presence.
Just Eat's stock has fallen more than 80% in the last 12 months. It has been under pressure from activist investors for its financial performance, and last October activist investor Cat Rock Capital urged the company to sell or spin off Grubhub.
Its shares jumped more than 20% on the news Wednesday.
