Uber Shares Rise on Postmates Deal
July 06 2020 - 12:10PM
Dow Jones News
By Dave Sebastian
Shares of Uber Technologies Inc. rose 5.4%, to $32.33, after the
company said it has agreed to buy Postmates Inc. for about $2.65
billion in an all-stock deal, 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
$7 billion.
Postmates can complement Uber's services with its stronghold in
Los Angeles, Las Vegas and San Diego, KeyBanc Capital Markets
said.
"Customers will have access to a larger selection of
restaurants, and for restaurants, the combined company will offer
more tools and technology to cost-effectively connect with a larger
customer base," KeyBanc said.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
July 06, 2020 11:55 ET (15:55 GMT)
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