Ride hailing giant Uber is reportedly in advanced talks to takeover food delivery company GrubHub in an all stock deal.
According to a Bloomberg report, the two companies could reach an agreement very soon. As soon as the news hit the market, shares of GrubHub jumped about 29% to $60.50, while those of Uber rose 6%.
Meanwhile The Wall Street Journal reported that Uber is offering $6 billion in stock in its takeover bid.
Neither company commented on the potential tie-up but Grubhub said in a statement it is “squarely focused on delivering shareholder value” and added that “like any responsible company, we are always looking at value-enhancing opportunities.”
It is being said that if the two firms come in agreement on a deal, it would unite two of the three largest US players in the food delivery segment.
UberEats, which offers food delivery services in more than 6,000 cities worldwide, has been a drag on the company’s bottom line since its inception in 2014. The company has been facing several issues across multiple markets it operates in.
Uber in January sold its Indian food business to local rival Zomato and earlier this month closed Eats operations in eight countries.
However, it has been seeing strong growth in its food delivery operation partly offsetting the sharp decline in ride-hailing during the global pandemic.
According to the research firm Second Measure, UberEats accounted for 20% of US meal delivery sales in March and Grubhub had 28%. A combined operation would overtake number one player DoorDash, which had 42%.
Meanwhile, last week GrubHub said the restaurant industry is facing enormous challenges from the COVID-19 pandemic, and the company is using nearly all of its profits in the second quarter to generate as many additional orders for its restaurant partners as possible.
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