Uber wants to swallow Grubhub and become the leader in meal delivery

Uber wants to swallow Grubhub and become the leader in meal delivery

© Supplied by Clubic
Uber Eats delivery boy © LCV / Shutterstock.com

© Shutterstock.com

The Californian company is said to be in advanced discussions to buy a competitor from its meal delivery division, and become number one, at least in the United States.

Across the Atlantic, Uber faces competition from DoorDash, which has grown from number 3 online food delivery to number 1 in less than two years. So, Uber decided to take action by entering into negotiations to buy the number 3 market in the United States, GrubHub, a listed company that saw its share price soar (+ 29%) Tuesday 12 may.

In the event of a takeover, Uber would become the market leader in the USA

Uber Eats has clearly taken advantage of the confinement to boost its activity and help to be, for certain open food outlets, the only source of income for the past two months. This gives wings to the parent company of the service, Uber, which hopes soon to finalize the acquisition of competitor GrubHub, as revealed by New york times.

If the giant of VTC manages to finalize the operation, it would become with Uber Eats (32% market share currently) the leading player in the online meal delivery market in the USA. Merging with GrubHub (24% market share) would allow it to be close to 55% market share, and to dominate the designated competitor DoorDash.

Uber Eats is on the rise

On a purely economic level, Uber launched a takeover bid at the start of the year, which for the moment remains blocked at the discussion stage between the two companies. Uber wants to buy GrubHug through a stock transaction, while the Chicago firm was valued at $ 4.3 billion a few days ago ($ 5.5 billion since Tuesday and the explosion of the price of Stock Exchange). Uber, for its part, is valued at $ 56 billion.

The GrubHub company would be ready to accept an offer which would be traded at 2.15 Uber shares for a GrubHub share with a unit cost around 60 dollars per share, the price that the company reached on Tuesday.

For Uber, the objective is to do with Uber Eats as it did with its VTC activity: that is to make it profitable. In the first quarter of 2020, Uber Eats saw its turnover jump by more than 50%, to 819 million dollars, which weighs for 23% of the revenues of the firm headed by Dara Khosrowshani.


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