- Uber will combine Postmates with its own food delivery service Eats to grow in the segment;
- It will issue approximately 84 million shares of common stock for 100% of the fully diluted equity of Postmates.
Uber announced a deal to acquire the American meal delivery service Postmates in an all-stock transaction for nearly $2.65 billion. It is part of Uber’s efforts to increase its food delivery business, as the company said that Postmates is highly complementary to Uber Eats.
While its core ride-hailing business is struggling amid the COVID-19 pandemic, Uber will combine Postmates with its own food delivery to grow in the goods delivery sector. Before, Uber was also considering buying Grubhub, but the company was sold to Just Eat Takeaway, a European delivery company.
“This transaction brings together Uber’s global Rides and Eats platform with Postmates’ distinctive delivery business in the U.S”, said the company in its investor relations page. According to Uber, Postmates is a complementary business because it has differentiated geographic focus areas and customer demographics than Uber Eats, also, Postmates’ strong relationships with small- and medium-sized restaurants, particularly local favorites, draw customers to the Postmates brand.
“Additionally, Postmates has been an early pioneer of ‘delivery-as-a-service,’ which complements Uber’s growing efforts in the delivery of groceries, essentials, and other goods”, said the company.
Uber said that for restaurants and merchants, Postmates and Uber Eats will together offer more tools and technology to more easily and cost-effectively connect with a bigger consumer base, adding that consumers will benefit from expanded choice across a wider range of restaurants and other merchants. Uber intends to keep the consumer-facing Postmates app running separately, supported by a more efficient, combined merchant and delivery network.
Uber currently estimates that it will issue approximately 84 million shares of common stock for 100% of the fully diluted equity of Postmates.