Hyderabad: In a new deal that is bound to change equations across the spectrum, food delivery aggregator services Zomato has acquired rights to Uber Eats. The latter, which is Uber’s food delivery business, has been acquired by the food delivery service for Rs 2,485 crore, according to reports.
The acquisition happened as part of an all-stock deal, where the shareholders of the target company receive shares in the acquiring company as payment, rather than cash.
Uber, which is a US-based company providing online ride services, will receive around 10% share of Zomato, as per initial reports. Users, who have Uber Eats app, will be re-directed to Zomato from now onward.
Zomato, the Gurgaon-based food delivery app, is one of the top players in the online food delivery market. With this acquisition, the combination of Zomato with Uber Eats might help them gain around 50% of India’s food delivery market share.
"Uber selling UberEats to Zomato is a sign of consolidation, which happens typically to achieve leadership post companies achieving sizeable aggregation. Zomato now has more than 50% share in the food delivery market with this deal,” said Yagnesh Sanghrajka, Chief Financial Officer of 100X.VC, an investing company.
“The strength of the delivery network of UberEats will benefit Zomato in growing its market share in South India and hence compete more fiercely with Swiggy nationwide,” he added.
The food delivery app also took to Twitter to announce its new consolidation.
“It’s a big day for us and an even bigger one for Uber Eats India – all of us at Zomato want to thank everyone who has contributed to making Uber Eats India what it is today and especially you, the foodies. We look forward to this new beginning and exciting times, together,” said a tweet from Zomato India.
Reacting to the acquisition, one of Uber Eats’ regular customers said, “Uber Eats used to provide better offers and discounts, even more than Zomato or Swiggy. Zomato buying Uber Eats hints at a monopoly of food delivery giants over the market. I only hope Zomato keeps Uber Eats’ offers intact and will provide services as they did before.”