Uber to Buy Remaining Stake in Online Grocer Cornershop
(Bloomberg) -- Uber Technologies Inc. has agreed to buy the remaining 47% stake in Chile’s online grocer Cornershop it doesn’t already own for about $1.4 billion in shares.
Uber first took a majority stake in Cornershop, the largest home delivery platform in Mexico and Chile, in 2019 in a bid to extend its geographic reach and bolster profits by bundling food delivery with rides.
The all-stock deal will see Uber exchange 29 million shares, including about 4 million shares for outstanding stock options, according to a securities filing Monday. Uber shares closed at $49.70 Friday, valuing the transaction at about $1.4 billion. The shares were down 2.7% Monday morning in New York.
Founded in 2015, Cornershop has a key foothold in Latin America and Canada. Uber secured regulatory approval for the deal from Chile last May and most recently in Mexico in December. Cornershop’s financial results are already included in Uber’s so there is no change expected in Uber’s gross bookings, revenue or adjusted profit as a result. The purchase is expected to close in July.
The coronavirus pandemic forced Uber to pivot into other lines of deliveries after ride-hailing bookings plummeted as people stayed home. The company bolstered its food delivery business with the $2.65 billion acquisition of Postmates last year and by adding groceries and other goods, including alcohol, by buying Drizly and its recent alliance with GoPuff. Uber’s move is the latest sign the San Francisco-based company is intent on penetrating the fast-growing grocery delivery market, which is currently dominated by Walmart Inc. and Instacart Inc. Total U.S. online grocery sales reached $7 billion in May, more than triple pre-pandemic levels according to a survey by grocery consultancy Brick Meets Click and Mercatus.
In July, Instacart sued Cornershop, alleging the company stole intellectual property, including listings of inventory at grocery stores.
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