As demand for contactless delivery, take-out dining and other food delivery service options continues to soar amid the coronavirus pandemic, Uber has announced its $2.65 billion plan to acquire Postmates.
After a failed attempt to acquire Grubhub last month, the popular ride-hailing service will deliver on a deal with another top food delivery service app.
"Uber Technologies, Inc. and Postmates Inc. today announced that they have reached a definitive agreement under which Uber will acquire Postmates for approximately $2.65 billion in an all-stock transaction," the company said in a press release Monday.
This all-stock deal will give consumers more restaurant and merchant choices from Postmates and Uber Eats, and it helps both companies streamline delivery with its joint network of courier technology.
Uber hailed Postmates as a "highly complementary" service for its brand and model that will now combine Uber's ride and eats platform with Postmates' delivery business.
“Uber and Postmates have long shared a belief that platforms like ours can power much more than just food delivery -- they can be a hugely important part of local commerce and communities, all the more important during crises like COVID-19," Uber CEO Dara Khosrowshahi said in a statement.
Uber's geographic-based platform that hones in on customer demographics will be bolstered by Postmates' "strong relationships with small- and medium-sized restaurants, particularly local favorites that draw customers to the Postmates brand," the statement added.
"Additionally, Postmates has been an early pioneer of 'delivery-as-a-service,' which complements Uber’s growing efforts in the delivery of groceries, essentials, and other goods," the statement continued.
Postmates co-founder and CEO Bastian Lehmann added that over the last eight years, their company has worked to enable "anyone to have anything delivered to them on-demand."
Uber estimated that it will issue "approximately 84 million shares of common stock for 100% of the fully diluted equity of Postmates."
Both companies' boards of directors approved the transaction and Postmates' majority stockholders supported the transaction. Pending the approval of Postmates stockholders and closing conditions, the deal is expected to close in the first quarter of 2021.
Uber has had a rough ride during the pandemic. In May, the company faced backlash over the decision to cut more than 6,000 jobs due to an 80% decrease in demand for its core service reported in an April earning report.
While the ride-sharing service has seen a decline in transportation demand during the COVID-19 outbreak, the Eats platform, which launched in 2014, has grown 54% year-over-year according to the same Q1 report, as more restaurants have switch to to-go and delivery service.