UBER-Besides, its ride-hailing business, operates a big meal-delivery unit known as Uber Eats, has proposed to acquire Grubhub, the online food delivery business.
Uber Technologies Inc is bidding to purchase Grubhub- the online food delivery company. Grubhub neither accepted nor denied the rumours over a possible tie-up. During the pandemic of COVID-19, Uber’s core business is shutting down, but the alliance could likely provide money-losing Uber Eats’ delivery restaurant service a leg up on market. The deal would unite two large food delivery players in the online market as more and more people are ordering meals during COVID-19.
According to the sources, Both Uber and Grubhub are negotiating over the stock exchange ratio deal and certainly, they have not reached an agreement. “We are extremely concentrated on delivering shareholder value. As we have consistently said, the merger could be an achievement in the industry, and, like other reputed company, we are always looking to achieve value-enhancing opportunities,” GrubHub’s said.
Recently, Uber has approached Grubhub with a potential all-stock takeover bid while in response Grubhub has demanded two Uber shares for each of its shares. It helps GrubHub’s stock value to be at more than $60 a share, securing a deal around $6.1 billion, or almost 25% Grubhub closing price on Monday. The Wall Street Journal is also working on the report. According to the Journal, the online food delivery company Grubhub is seeking 2.15 Uber shares for each of its shares whereas the food company declined to comment on the approach.
The talks are still in progress, but these discussions indicate that how the pandemic has upended everything from the way people are eating to how business must look for the ways for growing it. And food delivery being one of the essential aspects during the pandemic of coronavirus as people are at their homes, and many restaurants across the world remain closed, which surge the demand for delivery service.
There is no denying that Uber Eats is a direct competitor of Grubhub as the reports said, Uber holds a share of 25.2% while Grubhub is controlling the market with 26.7%. During the pandemic, the demand is increasing as people are enabling the services while staying at home.
Dara Khosrowshahi, Uber Chief Executive, said, “As our cab riding services are crashed due to the ongoing COVID-19 pandemic, our firm has taken the steps to preserve the strength of our balance sheet by turning our focus to Uber Eats and preparing us for better situation in future.”
“The food business is suffering from a challenging phase, but we are taking crucial measures to keep it on the right level while we battle with COVID-19,” said by the Founder and Chief Executive of Grubhub, Matt Maloney in a statement.
Eventually, the ride-hailing company Uber is trying to limit the damage to its business from COVID-19—as its main business has catered due to the banned in traveling. On the other hand, the food delivery business has seen a highly competitive phase as rivals are decreasing their prices day by day, so such an acquisition could help lessen the pressure.