Just Eat Takeaway.com (JTKWY) and Amazon (AMZN) enter into commercial agreement in the US

Starting today, Amazon Prime (NASDAQ: AMZN) members in the United States can sign up for a free, one-year Grubhub+ membership and access unlimited $0 delivery fees from hundreds of thousands of restaurants on Grubhub throughout the year. In addition to $0 delivery on eligible orders, Grubhub+ members get access to member-only perks and rewards.

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.

I am incredibly excited to announce this collaboration with Amazon that will help Grubhub continue to deliver on our long-standing mission to connect more diners with local restaurants. 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. Adam DeWitt, CEO of Grubhub

Key Terms

The commercial agreement automatically renews each year unless terminated by Amazon or Grubhub in accordance with the provisions of the commercial agreement. Under the commercial agreement, a subsidiary of Amazon will receive warrants (exercisable at a de minimis price) over 2% of Grubhub’s fully-diluted common equity. Amazon will also receive warrants (exercisable at a formula-based price) over up to a further 13% of Grubhub’s fully-diluted common equity, the vesting of which is subject to the satisfaction of certain performance conditions, principally the number of new consumers delivered through the commercial agreement. In certain circumstances the warrants can vest on an accelerated basis, in full or in part. Vested warrants may, in certain scenarios, be settled in cash or Company shares.

The commercial agreement with Amazon constitutes a Class 2 transaction under the UK Financial Conduct Authority Listing Rules. The gross assets of Grubhub as at 31 December 2021 were €6,521 million and the loss before tax for the 12 months ending 31 December 2021 was €403 million.

The Company, together with its advisors, continues to actively explore the partial or full sale of Grubhub. There can be no certainty that any agreement with any other parties regarding Grubhub will be reached or about the timing or terms of any such agreement(s). Any further announcements will be made as and when appropriate.

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