Uber Technologies, Inc. (NYSE: UBER) and Postmates Inc. say they have reached an agreement where Uber will acquire Postmates for approximately $2.65 billion in an all-stock transaction. The Postmates transaction brings together Uber’s global Rides and Eats platform with Postmates’ delivery business in the U.S. Postmates is roughly the same as Uber Eats, with different geographic areas and customers.
Postmates does business with small- and medium-sized restaurants, particularly local favorites that draw customers to the Postmates brand. Postmates has been an early pioneer of “delivery-as-a-service,” which complements Uber’s growing survival efforts in the delivery of groceries, essentials, and other goods.
Uber today also said that users in some Latin American and Canadian cities can now order groceries through the Uber and Uber Eats apps, in partnership with Cornershop, the popular grocery delivery startup based in Santiago, Chile. This follows the companies’ 2019 agreement for Uber to acquire a majority stake in Cornershop, which is expected to close in the coming days. Today’s news marks Uber and Cornershop’s first integrated grocery delivery experience.
For restaurants and merchants, Postmates and Uber Eats will offer more tools and technology to connect with a bigger consumer base, it’s claimed. Consumers can expand choice across a wider range of restaurants and other merchants. Delivery people – currently grossly underpaid – will more opportunities to earn income, with “increased batching of orders to make better use of their time.”
Following the closing of the takeover, Uber intends to keep the consumer Postmates app running separately, “supported by a more efficient, combined merchant and delivery network.”
Uber currently estimates that it will issue approximately 84 million shares of common stock for 100% of the fully diluted equity of Postmates. The boards of directors of both companies have approved the transaction, and stockholders representing a majority of Postmates’ outstanding shares have committed to support the transaction.
However, the takeover is subject to the approval of Postmates stockholders, regulatory approval and other customary closing conditions and is not expected to close until Q1 2021.