Uber Technologies Inc.’s board of directors has approved a $2.65 billion acquisition of food delivery rival Postmates Inc. in an all-stock deal, expected to be announced as soon as Monday morning in the U.S., according to people familiar with the matter.
Uber’s head of food delivery, Pierre-Dimitri Gore-Coty, is expected to continue to run Uber’s combined delivery business. The acquisition comes on the heels of Uber’s failed bid to acquire publicly traded GrubHub Inc., which was scooped up by Europe’s Just Eat Takeaway for $7.3 billion.
The deal would help Uber gain ground against privately-held DoorDash, which is the market leader in U.S. food delivery. While Postmates hasn’t kept apace with DoorDash, it established a strong position in Los Angeles and the American Southwest, both of which could be valuable to Uber Eats.
Last week, Reuters reported that Postmates had revived plans for an initial public offering following dealmaking in the U.S. online food delivery service sector that sparked acquisition interest in the company.
Postmates was last valued at $2.4 billion, when it raised $225 million in a private fundraising round last September.
Founded in 2011, San Francisco-based Postmates accounted for 8% of the U.S. meal delivery market in May, according to analytics firm Second Measure.
Uber had plans to also acquire Grubhub Inc through its Uber Eats business, but walked away from the deal as Just Eat Takeaway.com NV eventually reached a $7.3 billion agreement last month to buy the U.S. online food delivery company.