Uber eyes takeover of meal delivery rival Grubhub
Combination with Uber Eats would create largest food delivery app in US
Uber Eats: the company is has access to $8.2 billion of cash and cash equivalents, according to a filing last week. Photograph: Don Emmert/AFP/Getty
Uber has approached Grubhub about a takeover that would create the largest meal delivery company in the US at a time of surging demand from consumers in lockdown because of coronavirus, according to two sources with direct knowledge of the talks.
Grubhub, which operates in the US and in London, started yesterday with a market capitalisation of $4.5 billion (€4.2 billion). Uber, which last week led a $170 million investment into the scooter company Lime, is sitting on $8.2 billion of cash and cash equivalents, according to a filing last week.
The two sides have yet to agree to a definitive deal, one source said.
Trading in Grubhub on the New York Stock Exchange was temporarily halted after a Bloomberg News report that a deal could be completed this month sent its share price up 25 per cent. Uber’s shares also rose about 7 per cent on the news.
Uber said in a statement: “We are constantly looking at ways to provide more value to our customers, across all of the businesses we operate. We have shown ourselves to be disciplined with capital and we do not respond to speculative M&A premiums.”
Grubhub said: “As we have consistently said, consolidation could make sense in our industry, and, like any responsible company, we are always looking at value-enhancing opportunities. That said, we remain confident in our current strategy and our recent initiatives to support restaurants in this challenging environment.”
The coronavirus crisis has hit Uber’s car-booking business, with rides down 80 per cent globally in April. – Copyright The Financial Times Limited 2020