Uber is reportedly in talks to buy GrubHub
Uber is in talks to buy GrubHub in an all-stock deal, The Wall Street Journal reports. According to the WSJ's sources, GrubHub wants 2.15 Uber shares for each GrubHubs share.
Uber first approached GrubHub earlier this year with an offer, but the two companies are still in talks, according to the WSJ. A Bloomberg report says the deal could be finalized sometime this month. This comes a few months after reports emerged that GrubHub was looking to sell Uber, DoorDash and others.
Amid the COVID-19 pandemic, food delivery has been hot. In Q1, Uber Eats experienced major growth with gross bookings of $4.68 billion, up 52% from that same quarter one year ago. GrubHub, meanwhile, saw gross food sales increase to $1.6 billion, up from $1.5 billion in the same period last year.
Still, UberEats had just 20% of the market share and GrubHub had 28% in March 2020, while DoorDash accounted for 42% of it, according to Second Measure. A merger of UberEats and GrubHub would undoubtedly help Uber gain more dominance in the on-demand food delivery space.
This month, it became clear that Uber Eats wants to be the top or at least the second best food delivery service in the markets in which it operates. Earlier this month, Uber Eats pulled out of the Czech Republic, Egypt, Honduras, Romania, Saudi Arabia, Uruguay and Ukraine. In the United Arab Emirates, Uber transferred its Eats business operations to Careem, its wholly-owned ride-hailing subsidiary.
These decisions were made as part of the Company's ongoing strategy to be in first or second position in all Eats markets by leaning into investment in some countries while exiting others," Uber wrote in a filing.
Uber is currently trading up 7.65% at $34.05 per share and GrubHub is trading up 28.61% at $60.23 pre share.
GrubHub declined to comment for this story. We're still awaiting a response from Uber.