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Uber is looking to buy the meal-delivery company Grubhub, at a time where there's been a massive surge in demand for their services. Apparently Uber Eats approached Grubhub in February with an all-share takeover offer and the two companies have been in talks since.
Grubhub recently proposed that Uber pay 2.15 of its shares for every one Grubhub share, which Uber rebuffed as being very expensive. Now the two businesses are most probably negotiating a new but lower price. I am sure that Dara Khosrowshahi will do what is best for both the employees of the business and the shareholders.
The food delivery business in North America is in need of consolidation since there are four big players, including DoorDash and Postmates, with all these businesses losing a lot of cash. Yesterday Grubhub closed up 29% to $60.39, valuing the business at $5.6 billion; while Uber closed up 2.4% to $32.40 with a market cap of $56.3 billion.
The combined business would command an estimated 55% of the third-party food-delivery market, with DoorDash coming in at number two at about 35%. This is good for Uber Eats as it gets to double down on their home market without giving up their global reach. One could argue that the deal is value accretive.
Linkfest, Lap it Up
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