Written by Brenda Nakalema

Amazon Takes Stake in Food Delivery Service Grubhub

Amazon (ticker: AMZN) has partnered with Just Eat Takeaway in a deal that gives its U.S prime users a one-year …

Amazon (ticker: AMZN) has partnered with Just Eat Takeaway in a deal that gives its U.S prime users a one-year membership to food delivery service Grubhub.

According to the terms agreed upon in the deal, Amazon will have an initial option to take 1 2% stake in Grubhub, said the Netherlands-based Just Eat in a statement on Wednesday. The agreement further stipulates that Amazon will be able to increase its total stake to 15% of Grubhub, upon the condition of performance terms that focus on adding new customers.

Share in Just Eat (ticker: TKWY.Amsterdam) dropped nearly 67% year to date but climbed 13.86% to €15.64 ($16.03) in Amsterdam.

The deal, which comes into effect ahead of Amazon’s annual Prime Day shopping event on July 12, will make it possible for U.S prime members to have their delivery fees waived from certain restaurants where Grubhub operates.

“The agreement is expected to expand membership to Grubhub+ while having a neutral impact on Grubhub’s 2022 earnings and cash flow, and be earnings and cash flow accretive for Grubhub from 2023 onwards,” said Just Eat.

Just Eat asserted that it would continue to explore a full or partial sale of Grubhub, which it purchased last year for $7.3 billion in stock.