Uber to Buy Postmates for $2.65 Billion in Stock
By Dave Sebastian
Uber Technologies Inc. said it has agreed to buy Postmates Inc.
for about $2.65 billion in stock, the latest in a flurry of
consolidation moves in the food-delivery sector.
The combination boosts Uber Eats, the company's food-delivery
arm that already has an international footprint and is among the
largest in the U.S. DoorDash has the largest share of the U.S.
food-delivery market, according to research from Edison Trends.
Uber said it will keep the Postmates app running separately
after the deal's closing, expected in the first quarter of 2021.
Postmates, founded in 2011 and based in San Francisco, is the
smallest among the major U.S. food-delivery companies.
The deal comes after Uber's failed bid to buy Grubhub Inc. as
the ride-hailing giant seeks surer footing amid the Covid-19
pandemic, which has crushed its rides business. There were also
regulatory concerns that a combination with Uber would create a
monopoly in New York City. Grubhub last month agreed to be bought
by Dutch food-delivery giant Just Eat Takeaway.com NV for more than
Uber Chief Executive Dara Khosrowshahi on Monday said Uber Eats'
second-quarter bookings more than doubled from the prior year. In
May, he said Uber Eats was a bright spot, with gross bookings
rising 52% in the first quarter to $4.68 billion from the year-ago
period. Companies have offered steep discounts to get consumers to
try out their food-delivery services.
But Uber's rides business, which accounted for three-quarters of
Uber's revenue before the pandemic, plunged 80% in April, and the
company has taken cost-cutting measures such as eliminating several
thousand jobs. Though Uber said the decline in rides has softened,
a new wave of coronavirus infections has recently intensified in
Uber said Monday it estimates that it will issue about 84
million shares of common stock for 100% of Postmates' fully diluted
Write to Dave Sebastian at email@example.com
(END) Dow Jones Newswires
July 06, 2020 08:47 ET (12:47 GMT)
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