Amazon buys 2% stake in Just Eat’s Grubhub

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

Just Eat Takeaway has seen its shares dip 70% this year, with shareholders demanding it find a partner for Grubhub. Just Eat purchased Grubhub for $5.8 billion in shares last year.

Amazon customers will be offered free delivery on orders worth $12 or more in cities where Grubhub operates. The deal with Just Eat was announced on Wednesday as part of Amazon's July Prime Day promotion.

The deal is expected to give a lift to Grubhub as it struggles to keep pace with its competitors. Grubhub lost its share to Doordash and Uber Eats.

Amazon will receive warrants representing 2% of Grubhub's shares, and another 13% of shares that are conditional on the arrangement, so that it helps Grubhub attract enough customers.

Just Eat Takeaway said in a statement that the agreement is expected to expand membership to Grubhub while having a neutral impact on Grubhub's earnings and cash flow in the year 2022 and be earnings and cash flow accretive for Grubhub from 2023 onwards.

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