Uber Technologies Inc is in negotiations to buy online food delivery company Grubhub Inc in an all-stock deal, according to people familiar with the matter.
Uber Technologies Inc is in negotiations to buy online food delivery company Grubhub Inc in an all-stock deal, according to people familiar with the matter.
A merger could give Uber Eats’ money-losing restaurant delivery service a leg up on market leader DoorDash at a time when the coronavirus pandemic has upended Uber’s core business of shuttling people from place to place.
Uber and Grubhub are still haggling over the deal’s stock exchange ratio, and there is no certainty that they will reach an agreement, the sources said.
The potential acquisition suggests that the Silicon Valley disruptor is doubling down on its fastest-growing service in a scramble to adapt to what is likely to be a long business interruption.
“This would be an aggressive move by Uber to take out a major competitor on the Uber Eats front and further consolidate its market position,” Wedbush analysts said in a client note.
It could turn the crowded “U. S. meal delivery market into a two-horse race,” CFRA Research analyst Angelo Zino said.
Shares of Grubhub closed up 13.6% at $60.39, while Uber’s gained rose 2.4% to $32.40.
An Uber spokesman said the company does not respond to “speculative M&A.” Grubhub, in a statement, did not confirm the talks but said “consolidation could make sense in our industry.”
Experts say consolidation is long overdue in the space, where demand from worried, home-bound consumers is surging.
