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Why Amazon Should Acquire GrubHub Next

Why Amazon Should Acquire GrubHub Next

Wedbush's senior tech analyst Aaron Turner thinks, Inc. (NASDAQ: AMZN)'s next takeover target should be GrubHub Inc (NYSE: GRUB), a platform that delivers food made by restaurants to customers.

Needless to say, Amazon has the necessary resources to invest in multiple initiatives to drive its business, Turner said as a guest on CNBC's "Squawk on the Street" segment Tuesday. Perhaps more importantly, Amazon can move "quickly" on the move that would compliment its proposed acquisition of the grocery chain Whole Foods Market, Inc. (NASDAQ: WFM).


The acquisition seems even more compelling when considering there is an overlap between Whole Foods' client base and GrubHub's customers, the analyst added.

While Amazon could use GrubHub's platform to delivery groceries, Turner believes Amazon's ambitions extend beyond the one food segment. Amazon's food initiatives will focus on two important areas, including fresh food at its newly acquired Whole Foods and the entire restaurant industry.

The problem is growth in both verticals isn't as robust as it has been in the past, which implies Amazon needs to pursue another acquisition, such as GrubHub, to support its new food initiatives.

"I don't think [Amazon] is the kind of company that would let the restaurant vertical just wither on the vine," he concluded.

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