- Title: Uber approaches Grubhub with acquisition offer -sources
- Date: 13th May 2020
- Summary: LONDON, ENGLAND, UNITED KINGDOM (FILE) (REUTERS) MAN CHECKING UBER APP ON PHONE VARIOUS OF UBER APP ON PHONE
- Embargoed: 27th May 2020 11:46
- Keywords: GrubHub GrubHub CEO Matt Maloney Uber Uber Eats Uber Technologies Inc Uber acquisition offer Uber approaches Grubhub
- Location: LONDON, ENGLAND, UNITED KINGDOM/NEW YORK, NEW YORK, UNITED STATES/MEXICO CITY, MEXICO
- City: LONDON, ENGLAND, UNITED KINGDOM/NEW YORK, NEW YORK, UNITED STATES/MEXICO CITY, MEXICO
- Country: Various
- Topics: Company News Markets,Economic Events
- Reuters ID: LVA001CDRKSJX
- Aspect Ratio: 16:9
- Story Text: 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.
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.
DoorDash had a 42% share of meal delivery sales in March 2020, versus 20% for Uber Eats and 28% for Grubhub, data from analytics firm Second Measure showed.
As of Monday (May 11) Grubhub had a market capitalization of about $4.3 billion, while Uber was valued at nearly $55 billion, according to Refinitiv data.
Uber Eats' first-quarter revenue soared more than 50% to $819 million after restaurants across the country shuttered their dining rooms to curb the spread of the novel coronavirus.
The service, available in more than 6,000 cities worldwide, has been a drag on Uber's bottom line since its 2014 inception due to heavy spending on customer promotions and driver incentives.
Uber in January sold its Indian food business to local rival Zomato and earlier this month closed Eats operations in eight countries.
Last week, Grubhub said the restaurant industry was facing enormous challenges from the COVID-19 pandemic, and vowed to use nearly all of its second-quarter profits to help drum up business for its restaurant partners.
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