Uber to acquire Postmates delivery app in $2.65 billion deal

Updated: The all-stock takeover will bring Uber Eats and Postmates together, strengthening Uber's position in the US delivery market.

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Update: Uber has confirmed the deal.

Uber is reportedly on the verge of acquiring the Postmates delivery app in a deal valued at $2.65 billion. 

People familiar with the matter told Bloomberg that the acquisition could be announced as soon as Monday. 

The all-stock deal would keep Postmates CEO Bastian Lehmann at the helm of the delivery service, which may run as a separate business to Uber's own food and drink delivery service, Uber Eats. 

Another individual said that Uber Eats chief Pierre-Dimitri Gore-Coty will stay on to oversee the combined delivery service.

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According to the publication, talks have been on-and-off for roughly four years, but it was only in the last week that a concrete offer was considered, and accepted after Uber approached Postmates. The Uber board of directors is thought to have approved the deal. 

Co-founded in 2011 by Lehmann, Sean Plaice, and Sam Street, Postmates is an online delivery service that can be used by customers to purchase local takeaways, as well as drink, household goods, and general supplies. 

San Francisco-based Postmates accounts for over 1,000 employees, 500,000 delivery staff, 600,000 merchants, and is able to serve roughly 80% of US households across 50 states. 

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However, the company faces stiff competition from other US delivery services including Uber Eats itself and DoorDash. The acquisition of Postmates by Uber could give the latter a boost by extending coverage across the United States and may strengthen Uber's position as a rival to DoorDash, which currently holds the top spot in the country's mobile food delivery market. 

Postmates was expected to go public in 2019. However, market conditions at the time -- and now due to the uncertainty caused by COVID-19 -- delayed in the initial public offering (IPO). 

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Postmates has previously raised $903 million through 13 funding rounds. Past investors include GPI Capital, London Impact Ventures, and Tiger Global Management. 

Update 13.11 pm BST: Uber has confirmed the takeover. Under the terms of the deal, Uber will pay $2.65 billion for 84 million shares of common stock for 100% of the fully diluted equity of Postmates. Uber intends to keep the Postmates app running as a separate service, "supported by a more efficient, combined merchant and delivery network."

"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," said Uber CEO Dara Khosrowshahi. "As more people and more restaurants have come to use our services, Q2 bookings on Uber Eats are up more than 100 percent year on year. We're thrilled to welcome Postmates to the Uber family as we innovate together to deliver better experiences for consumers, delivery people, and merchants across the country."

The deal is subject to approval by Postmates stockholders and regulators. The acquisition is expected to close in Q1 2021.

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