The approach by Uber to acquire Grubhub follows hot on the heels of the £6bn merger of Just Eat and Dutch firm, which completed earlier this year. The potential transaction is consistent with the recent consolidation trend seen in the food delivery sector globally, as evidenced by an increase over the past 24 months in the level of M&A activity in this sector by deal value but a decrease in total deal volume over that same period.

If the deal proceeds, the combined Uber Eats and Grubhub businesses are estimated to have a c. 55% share of the US meal delivery market, with DoorDash having 35%. With increased regulatory scrutiny of technology mergers (and particularly those in the food delivery sector) generally, Uber and Grubhub will undoubtedly have their work cut out for them to get the deal over the line. Since its announcement yesterday, the transaction has already come under fire from lawmakers, city officials and antitrust experts.

Despite most major players seeing an initial reduction of orders in early to mid March due to Covid-19, by the end of the month there was clear signs of upward trajectory as demand increased amid extended lockdown measures and the introduction of contact-free deliveries. With the timing for lifting "stay at home" guidance still uncertain, food delivery may be one of the few sectors to see an increase in M&A activity driven by the pandemic.