Uber making another purchase expand his growing meal delivery business Eats the weakening of the main units of the taxi. After a failed attempt to devour Grubhub, Uber is considering the purchase of a competitor Postmates.
On Tuesday shares of Uber (UBER) rose 4.9%, which brought the price is 4.5% higher year to date.
Restoring growth since mid-March, the stock Uber has received a good signal for growth after the publication of the quarterly results on may 7. Although the core business of a taxi suffered unprecedented damage, with an incidence of 80%, 53% growth of meal delivery business Eats helped partially to compensate for it and gave a positive signal for investors.
However, an unsuccessful attempted acquisition of a major competitor – the grocery delivery service GrubHub debunked hopes for much-needed consolidation in the industry and shares Uber fell by 13.2% over the last month.
Now Uber is making one more attempt acquisition of a competitor Eats – a private Californian company called Postmates, which, although considerably behind the market leaders GrubHub and DoorDash, controls about 10% of the American market for food delivery, working in almost 3,000 cities in the United States. Services Postmates is available 80% of Americans, the partners of the platform includes more than 600,000 restaurants and shops.
For its part, the company has not yet commented on the rumors that appeared in the media.
Analyst of Canaccord Genuity Maria Ripps noted that Postmates as the fourth largest player in the market of food delivery in the USA, looks like a good target for consolidation.
Although Ripps highlighted the fact that a smaller percentage of customers use Postmates, Uber Eats compared to DoorDash, at the same time “Postmates is a market leader in Los Angeles, one of the weakest markets Uber Eats”.
According to reports, Postmates is also considering holding its own IPO in July, which could value the company at $2.4 billion and give the necessary funding for growth.
Analysts generally assess the potential acquisition of the company, Uber, Postmates as a positive step that could cut costs in the future, however, the barrier may be a denial of approval from regulatory and antitrust authorities.
Some analysts say that concerns about potential problems of regulation was one of the reasons for the cancellation of mergers Uber Eats-Grubhub, which would combine the two largest players in the market. In June, “Grubhub signed a merger with the European company Just Eat Takeaway for $7.3 billion”.
The situation is complicated by the deteriorating financial position of Uber in the background of the pandemic COVID-19, while on 7 may the company published a still strong balance sheet of $9 billion for the quarter ending March 31, 2020.
