Business

Uber mulls buying GrubHub in major consolidation of U.S. food delivery business

Uber is considering acquiring Grubhub in a deal that would give the companies control over a majority of the U.S. food delivery business, according to published reports.
A combined merger of GrubHub and Uber Eats would control more than half of the U.S. market for food delivery services. (Charles Rex Arbogast/Associated Press)

Uber is considering acquiring Grubhub in a deal that would give the companies control over a majority of the U.S. food delivery business, according to published reports.

Ride-sharing and food delivery giant Uber Technologies Inc. approached Grubhub Inc. earlier this year with an all-stock takeover offer, The Wall Street Journal reported Tuesday, citing sources. The two companies are continuing to discuss the combination, and Uber's board will consider it in the coming days.

Uber and Grubhub declined to comment on the report when contacted by The Associated Press.

Combined, Uber Eats and Grubhub would control 55 per cent of the U.S. food delivery market, according to Dan Ives, an analyst with Wedbush Securities. DoorDash, their chief competitor, controls around 35 per cent of the market.

"Clearly this would be an aggressive move by Uber to take out a major competitor on the Uber Eats front and further consolidate its market share position, especially as the COVID-19 pandemic continues to shift more of a focus to deliveries versus ride-sharing in the near term," Ives wrote in a note to investors.

Grubhub shares shot up 36 per cent to $63.95 in midday trading, while Uber's shares were up 8 per cent to $34.28.

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