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GrubHub and Groupon Shares Pop on News of Strategic Partnership

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Shares of Grubhub (GRUB - Free Report) and Groupon (GRPN - Free Report) are moving higher in after-hours trading on Monday after the companies announced a strategic partnership that will bring food delivery to Groupon customers in the United States.

On top of allowing customers to order food delivery from Grubhub’s partner restaurants directly on Groupon’s platform, the deal is expected to include exclusive Groupon deals for those using the new delivery options.

“We’re thrilled to join forces with Grubhub to vastly expand the number of food delivery options available through our marketplace,” Groupon CEO Rich Williams said in a press release. “This partnership connects two of the biggest players in local commerce and is a win for both consumers and restaurants by providing people with more savings and access to the food they want, when they want it.”

In addition to the new partnership, Grubhub is acquiring certain assets in in 27 of Groupon’s OrderUp food delivery markets. Grubhub will also provide ordering and delivery services in Groupon To Go markets.

“As a leader in local delivery, we’re always looking for more ways to make it easier for diners to find and order food wherever they may be,” Grubhub CEO Matt Maloney said. “Groupon’s massive, active mobile audience - and great savings opportunities - will help drive new customers and more order volume for our restaurant partners, further enhancing the value of the Grubhub network.”

Groupon shares closed about 1% lower on Monday, but the stock gained nearly 4% in after-hours trading shortly after the announcement was made. Grubhub was also down slightly on the day, but shares popped more than 3.5% following the announcement.

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