Uber, Postmates Agree on $2.65 Billion All-Stock Deal

• Uber plans to announce a tie-up with food delivery rival on Monday

• Uber exec would still continue to run its delivery business

According to people who are familiar with the current development in Uber Technology Inc (UBER), it was revealed that the company has signed an agreement to acquire Postmates Inc in a $2.65 billion all-stock. This latest development is expected to be announced today. 

However, an anonymous source revealed that Uber Eats Pierre-Dimtri Gore-Coty is expected to continue to run and manage Uber’s combined delivery business.  Based on this, it is not yet clear the role Postmates Chief Executive Officer Bastian Lehmann will take after the acquisition process is completed. 

The move to acquire Postmates came after Uber Technology failed the bid to acquire GrubHub Inc. GrubHub was later acquired by Europe’s Just Eat Takeaway.com for $7.3 billion. The anonymous source revealed that the Uber board of directors has already approved the deal, but it can still be subjected to change if the need arises. 

The takeover is expected to help Uber compete effectively against the privately-held DoorDash Inc, which is currently the leading food delivery company in the United States. Although Postmates hasn’t kept pace with DoorDash, it has gained more ground in American Southwest and Los Angeles. With the acquisition, Uber food delivery services would gain more coverage.

About Postmates

Postmates was founded in 2011. It was the first company to allow customers in the U.S to order their meals through a mobile app.  But after the company came on board, others began to follow. The more the delivery companies increase, the more the competition against Postmates. This has made Postmates fall into the fourth category with DoorDash on top of the list. 

In February, last year, Postmates reportedly filed confidentially for an IPO. However, this was delayed because of the current declining market condition.

It was revealed that Postmates is already planning to restart the process. This would be done alongside an offer from a shell company that deals with taking another company public. The name of the company is Special Purpose Acquisition Company (SPAC).

Following the news, on Friday, Uber closed up at $30.68 after it had gone up more than $4%.