Uber Technologies Inc said on Monday it would buy Postmates Inc in a $2.65 billion deal, looking to expand its reach into the food-delivery market as the coronavirus crisis upends its core ride-hailing business.
The move is just weeks after Uber walked away from a deal to buy Grubhub, which would have given Uber’s money-losing restaurant delivery service a leg up on market leader DoorDash.
U.S. online food delivery company Grubhub agreed to be acquired in June by Just Eat Takeaway.com NV in a $7.3 billion deal.
Uber, which has been under pressure as ride-hailing services across the globe plummets because of lockdowns, offered a premium of about 10% on Postmates' last valuation of $2.4 billion. Uber shares were up about 9% in premarket trading.
"As more people and more restaurants have come to use our services, Q2 bookings on Uber Eats are up more than 100% year on year," said Uber Chief Executive Officer Dara Khosrowshahi.
Uber currently estimates that it will issue about 84 million shares of common stock for 100% of the fully diluted equity of Postmates, the company said in a statement.
The boards of both companies have approved the transaction, and stockholders representing a majority of Postmates' outstanding shares have committed to support the transaction, it added.
Postmates operates in 4,200 U.S. cities delivering food and other products from restaurants and stores to customers' doorstep. One of the many taglines reads, "Have chips but no guac? Postmate it."
Founded in 2011, San Francisco-based Postmates accounted for 8% of the U.S. meal delivery market in May, with its biggest rival DoorDash leading with a 44% market share, according to analytics firm Second Measure.
Postmates in September raised $225 million in a private fundraising round. The company's biggest rival, Doordash, raised $400 million from private investors at a valuation of $16 billion in June.