Uber Technologies will acquire delivery service Postmates for approximately $2.65 billion in an all-stock transaction. This transaction brings together Uber’s global Rides and Eats platform with Postmates’ delivery business in the US.
Postmates is complementary to Uber Eats, with differentiated geographic focus areas and customer demographics. Postmates also has established relationships with small- and medium-sized restaurants, particularly local favorites that draw customers to the Postmates brand.
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.
For restaurants and merchants, Postmates and Uber Eats will together offer more tools and technology to connect with a bigger consumer base more easily and cost-effectively. Consumers can benefit from expanded choice across a wider range of restaurants and other merchants. Delivery people will have more opportunities to earn income, with increased batching of orders to make better use of their time. Following the closing of the transaction, Uber intends to keep the consumer-facing 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.
The transaction is subject to the approval of Postmates stockholders, regulatory approval and other customary closing conditions and is expected to close in Q1 2021. Wachtell, Lipton, Rosen & Katz served as legal counsel to Uber. J.P. Morgan Securities LLC served as financial advisor and Latham & Watkins LLP as legal counsel to Postmates.