The merger between Uber Technologies Inc. (NYSE: UBER) and Grubhub Inc. (NYSE: GRUB) appears to be off the table. Although regulators have thoroughly trashed this deal on monopolistic concerns, a new challenger has entered the ring. European rival food delivery service company, Just Eat Takeaway.com, is reported to be in advanced talks to merge with Grubhub.

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Food delivery companies saw a big uptick in business as a result of the COVID-19 pandemic. However, many of these companies have problems with profitability. Uber’s CEO Dara Khosrowshahi previously noted that one way to solve this problem is through consolidation.

The competition among food delivery companies is tough, and there are no truly high barriers to entry. A local delivery service is definitely capable of competing against Uber Eats or Grubhub, but it is severely outmatched without an app or a following of millions of consumers who use it as a default.

The combination of Grubhub and Just Eat Takeaway would create a transatlantic food delivery juggernaut with a sizable market share. Right now, this merger looks like a very possible reality.

The deal appears to be structured as an acquisition by Just Eat Takeaway.

Uber might be the big loser in all of this. Consolidation would have helped out the bottom line and the path to profitability, but that seems to be out the window. Also, Uber may be beholden to paying a breakup fee because this acquisition did not go through.

Uber stock traded down about 4% to $34.97 on Wednesday, in a 52-week range of $13.71 to $47.08. The consensus price target is $40.39.

Grubhub stock was relatively flat at $57.85. It has a 52-week range of $29.35 to $80.25 and a consensus price target of $48.27.

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