On Monday, the company Uber and its competitor in the market food delivery company Postmates confirmed the rumors of the merger appeared last week. Should the deal be more likely to be approved by regulators than the previous failed attempt by Uber’s largest market player – company GrubHub.
Stock Uber (UBER) on Monday grew by 5.6% amid investors ‘ optimism regarding the future benefits brought by its purchase Postmates – the fourth largest food delivery service in the United States.
The official press release of the companies has confirmed the rumors of the merger appeared last week. Marketinfo.pro wrote about the companies in the article “Uber Shares rose 5% on the background of rumors about a possible purchase of a competitor Eats – the company Postmates”.
For the last quarter of the campaign, Uber has grown by almost 30%, recovering the losses from the beginning of the year and coming growth of more than 3%.
According to the report, Uber plans to produce about 84 million common shares for 100% of the capital Postmates, which equates to approximately $2.65 billion.
“The boards of Directors of both companies have approved the deal, now it is subject to approval of shareholders Postmates, to regulatory approval and other customary closing conditions and is expected to be closed in the 1st quarter of 2021,” reads the press release companies.
According to Uber, the merger is very important the whole industry, which is seriously experiencing negative impact of the pandemic COVID-19. Many workers are in need of delivery services, as translated into remote work, restaurants and cafes it helps to sell more in the conditions when a full “landing” on the ground impossible because of quarantine measures, and many Americans lost their jobs, need it.
“Uber and Postmates have long shared the belief that platforms like ours can provide much more than just deliver food – they can be an extremely important part of local Commerce and communities, that is even more important during crises like COVID-19. To the extent that, as more people and more restaurants use our services, the number of orders in the second quarter to Uber Eats has grown by more than 100% compared to last year’s value,” said Uber CEO Dara Khosrowshahi.
In the crisis of a pandemic and quarantine measures business Uber Eats has shown strong growth and helped to partially compensate for the 80% loss of the core business of a taxi. Thus, the deal is extremely important for Uber at the present time, and in the long term.
In may, Uber had plans on purchase of GrubHub, the largest U.S. company in the market deliveries of food, but negotiations broke down due to disagreements over financial issues and the fear of accusations of antitrust authorities. In the end, Grubhub has signed a merger with the European company Just Eat Takeaway for $7.3 billion
Although the deal brings together two major players in the market, according to Edison Trends, Postmates-the Uber still will lag behind market share DoorDash.