Uber Explores Potential Acquisition of Expedia, Stocks React
Uber Technologies Inc. is reportedly considering a potential acquisition of Expedia Group Inc., a move that has sent ripples through the stock market. In premarket trading, Expedia’s stock saw a significant rise while Uber’s shares experienced a decline.
According to a report by the Financial Times, Uber has been in discussions with advisors regarding the feasibility and structure of acquiring the travel booking giant. The merger idea was initially proposed by a third party, and talks are still in preliminary stages. As of now, Uber has not made a formal approach to Expedia.
If the acquisition were to proceed, it would mark Uber’s largest to date. Expedia’s current market valuation, which is considerably smaller than Uber’s, makes it an attainable target. The travel company’s portfolio includes well-known platforms such as Hotels.com and Vrbo.
Financially, the merger could prove beneficial for Uber. In the previous year, Expedia generated nearly $13 billion in revenue and over $1 billion in operating income. This compares favorably to Uber’s 2023 figures of $9.9 billion in revenue and $652 million in operating income.
The potential acquisition aligns with Uber’s strategic vision of evolving into a “super app” that offers a wide range of services beyond its core ride-hailing business. Previous acquisitions, including Postmates and Transplace, have already expanded Uber’s service offerings to encompass various transport modes and delivery services.
Uber CEO Dara Khosrowshahi’s history with Expedia, where he previously served as CEO, could potentially smooth the merger process. Khosrowshahi’s ongoing role as a non-executive director at Expedia may also facilitate negotiations and integration efforts if the acquisition moves forward.
As discussions continue, market observers will be closely watching for further developments in this potential major shift in the travel and transportation sectors.