Uber has reportedly made a takeover bid for rival firm Grubhub in a deal which would make it the largest food delivery company in the US.
Uber Eats and Grubhub, both of which operate in the US and the UK, could reportedly complete a tie-up deal as soon as this month, sending share in both companies skyrocketing.
Although both sides are still understood to be establishing the finer details of the deal, emerging reports saw Grubhub’s share price jump 25 per cent, while Uber’s shares rose around seven per cent.
Despite Uber Eats’ larger size, seeing gross bookings of $4.68 billion in the first quarter compared to Grubhub’s $1.6 billion, it has a smaller market share in the US according to Second Measure, accounting for just 20 per cent of the market compared to Grubhub’s 28 per cent.
While Doordash currently eclipses them both with 42 per cent of the US market, the newly combined entity would become the largest player in the US by some margin.
While details of the deal remain fairly hushed, the Wall Street Journal reported that it would be an all-stock deal and Grubhub wanted 2.15 Uber shares for every one of its own.
This marks the latest huge shift in the market which has recently seen the consolidations of numerous key players.
In late April, Just Eat and Takeaway.com’s landmark £6 billion merger was approved by the UK’s competition authority, just days after granting approval to rival Deliveroo and Amazon’s tie-up.
It also comes as the sector struggles with dramatically shifting circumstances, with demand for home delivery skyrocketing as much of the world remains in lockdown.
Despite the increase in demand, many companies have suffered from the closure of big brands like KFC, leading Deliveroo to announce the dismissal of 300 staff last month.