Uber (NYSE:UBER) is seeing its stock rise on Monday after announcing a deal to acquire food-delivery service Postmates.
Uber will be picking Postmates up for roughly $2.65 billion. However, it won’t be doing this with cash. Instead, the company plans to issue roughly 84 million shares of UBER stock to fund the transaction.
Uber points out that this deal won’t be the death of Postmates. Rather than just combine the service with Uber Eats, its own food-delivery service, it will continue to keep the Postmates app up and running. However, the app will gain expanded options with access to the company’s network.
Uber CEO Dara Khosrowshahi said this about the deal.
“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”
While the deal still needs to complete customary closing conditions, it doesn’t look like that will be a problem. Both companies’ Boards of Directors are in favor on the acquisition, as are a majority of Postmates shareholders. The deal is expected to close during the first quarter of 2021.
Postmates deal with Uber brings an end to rumors the company was planning to file an IPO this week. It was reportedly looking to trade on the Nasdaq under the “MATE” stock ticker.
UBER stock was up 5.4% as of Monday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.
