Uber is reportedly in talks to acquire GrubHub, according to a report by The Wall Street Journal. While there has been nothing closed as of now, WSJ reports that Grubhub is looking to have 2.15 Uber shares for each of its own.
The timing for the acquisition — which by the way is the second time that Uber is contemplating — seems quite intriguing. Yes the food delivery market is hot right now, with Uber Eats itself reporting over $4.68 Billion in gross bookings for Q1 2020. But then, Uber is shutting down its Eats businesses abroad since they do not seem financially viable. The Grubhub acquisition thus looks like an attempt to give a further push to food delivery, and may be make the forte as the center piece for Uber’s business going forward.
Another Bloomberg report also points towards a possible acquisition. The report says that the companies are in talks about a deal and could reach an agreement as soon as this month. Of course the deal could fall apart, and as they say, do not presume anything until its on paper.
Grubhub, in a comment provided to Bloomberg, did not shy away from possible consolidation opportunities. The company said, “Consolidation could make sense in our industry, and, like any responsible company, we are always looking at value-enhancing opportunities. That said, we remain confident in our current strategy and our recent initiatives to support restaurants in this challenging environment.”
In either case, the news seems to have benefited both companies on the stock markets. Wall street embraced a possible acquisition resulting in a 37% rise in Grubhub’s rather dreadful market run, while a 8% rise for Uber’s share price. Grub’s value stood at $5.9 billion while that of Uber in excess of $59 billion.
Uber recently announced shuttering of its Eats business in 7 countries along with transferring its UAE business to Careem. The company also sold its India business to rival Zomato earlier this year.
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