Uber to buy Postmates in $2.65 billion stock deal, expands food-delivery reach

[July 06, 2020]  (Reuters) - Uber Technologies Inc on Monday offered to buy Postmates Inc in a $2.65 billion all-stock deal, looking to expand its reach in the food-delivery services arena while more people order at home due to coronavirus-led restrictions.

Uber, under pressure as its core ride-hailing business reels from lockdowns across the globe, offered a premium of about 10% on Postmates' last valuation of $2.4 billion. Postmates in September raised $225 million in a private fundraising round.

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.

The move comes only weeks after Uber abandoned its plan to buy Grubhub Inc through its Uber Eats business. The U.S. online food delivery company was acquired in June by Just Eat Takeaway.com NV in a $7.3 billion deal.

(Reporting by Subrat Patnaik in Bengaluru; Editing by Amy Caren Daniel, Bernard Orr)

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