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Uber to buy Postmates for $2.65 billion: Merger of two largest food delivery companies

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This is really big news for Uber and Postmates, Yes, Uber is all set to Aquire the Food deliver company Postmates. As per the circulating rumours, the deal between both companies will take place this weekend. Uber is one of the biggest food delivery services with a large share of the food delivery market, Decided to merge with Postmates, these two of the largest food delivery companies — Uber Eats and Postmates will work under one banner.

Uber failed in its plans to purchase fellow delivery company Grubhub earlier this year due to apparent regulatory concerns. Instead, it has agreed to purchase Postmates for $2.65 billion in an all-stock transaction, issuing approximately 84 million shares in return for 100% of the equity of Postmates.

“Over the past eight years we have been focused on a single mission: enable anyone to have anything delivered to them on-demand,” Postmates co-founder and CEO Bastian Lehmann said in a statement. “Joining forces with Uber will continue that mission as we continue to build Postmates while creating an even stronger platform that brings this mission to life for our customers.”

The move comes at a crucial time for Uber, which reported $2.9 billion in losses in the first quarter of 2020, with rides dropping substantially in the wake of the coronavirus pandemic. The company laid off 3,700 employees recently and has branched into more delivery services to compensate for ride losses.

Uber Eats developed 54% year-over-year as indicated by a similar report, reinforced by an eatery industry compelled to move to takeout while coronavirus lockdowns stay set up.

In spite of the fact that lockdown limitations have facilitated over the United States, it’s hazy if cafés will see an arrival to standard eat in numbers at any point in the near future. Numerous urban communities states despite everything expect cafés to restrict the quantity of clients in the structure and to space them out, and a large number of Americans may stay awkward eating out until the pandemic is completely leveled out, something that probably won’t occur until one year from now.

The procurement may give Uber an edge over its greatest opponent, DoorDash, which controlled about 35% of the food conveyance showcase in late 2019.

For customers, the most outstanding impact could be an ascent in expenses. A 2016 paper studying the impacts of mergers and acquisitions discovered “proof that M&As increment markups on normal across U.S. fabricating businesses, however … little proof for channels regularly referenced as possible wellsprings of profitability and proficiency gains,” so those expenses you see attached to your Postmates bill may bounce.

The deal could likewise represent an issue for eateries. With the decrease in feast in deals, cafés without their own conveyance foundation are compelled to go to administrations, for example, Uber Eats and Postmates, losing a lump of their deals to the commission those administrations charge.

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