By Levi Sumagaysay
Uber Technologies Inc. disclosed Tuesday that it expects to complete its acquisition of Postmates Inc. by the end of the year after the Justice Department approved the deal with conditions.
The $2.65 billion deal, which now needs to be approved by Postmates shareholders, will bolster Uber’s growing food-delivery business. The combination will give Uber /zigman2/quotes/211348248/composite UBER -5.42% at least a 37% market share in the United States, according to Edison Trends, which would be second in the nation in food delivery behind DoorDash Inc.
The Justice Department allowed the merger to proceed after Uber agreed Monday to waive exclusivity provisions between Postmates and about 800 restaurants in 11 cities in the U.S., according to Uber’s Tuesday filing with the Securities and Exchange Commission . In addition, Uber promised not to enter into exclusivity agreements with those restaurants for six months after the deal closes.
In July, Uber announced that it would buy Postmates in an all-stock deal , beating out two unnamed special-purpose acquisition companies that had made offers as Postmates’ business benefited from pandemic-related lockdowns, an Uber filing in September showed . Those companies had offered Postmates a $2.3 billion and $2.5 billion valuation in early June. The filing also disclosed that Uber and Postmates walked away from a merger last year.
Uber stock was down less than 2% in Monday morning trading, after a huge week of gains amid the company’s expensive election win in California , third-quarter earnings report , and hopes for a COVID-19 vaccine that could resuscitate the flagging ride-hailing business. Shares closed Monday at an all-time high of $48.18, after rising 34.7% since Election Day.