San Francisco and New York /
Uber studies a possible offer for Expediathe American website for travel reservations of 20 billion dollars, in what will be by far the largest acquisition for the ride-hailing company as it seeks to further diversify and find new avenues for growth.
Uber approached advisors in recent months after a third party floated the idea of an acquisition of Expedia to study whether such a deal would be possible and how to structure it, according to three people familiar with the process.
One of the central themes of the debates of Uber was the role of the company’s CEO, Dara Khosrowshahiwho served as executive director of Expedia from 2005 to 2017 and remains a non-executive director of its board of directors. That makes it likely that any offer will be friendly and that he will recuse himself from deal discussions.
People noticed that the interest of Uber It is at a very early stage and a deal may not be finalized. No formal offer has been made to Expedia and there are no talks at this time, they said.
Khosrowshahi is a protégé Barry Dillerthe serial deal maker who serves as CEO of Expedia. The head of Uber worked in IACthe internet and media group Dillerfor seven years and has described him as a “great mentor to me.”
Uber, Expedia and Diller They did not want to comment. After the report of Financial Timesthe actions of Expedia they went up 3.8 percentwhile those of Uber fell 2 percent.
In recent years Uber has expanded from its ride-hailing roots to train and flight reservations, food delivery, corporate logistics and advertising as it seeks to transform itself into a “super app” similar to the multipurpose platforms created by Chinese technology groups such as WeChat.
Khosrowshahi said to Financial Times this week: “We want to give them the tools so they can go anywhere in their city and get anything they want.”
The incorporation of Expedia and its technology reservations can turbocharge those ambitions. The fourth largest online travel company generated 12 thousand 800 million of dollars in revenue in 2023 amid a post-war tourism boom pandemicbut warned this summer that it faces a slowdown in travel demand.
The power of mergers and acquisitions Uber was reinforced by an increase in 85 percent in its share price over the past year, giving it a market capitalization of $173 billion. In February, the San Francisco-based company reported its first year of operating profitability, driven by growing ride-hailing demand along with its express division. growth of food deliveries, logistics and advertising.
The financial director, Prashanth Mahendra-Rajahsaid in August that the “top priority” of Uber to invest capital is to invest in the growthincluding through acquisitions.
The actions of Expedia have risen more than 50 percent in the last year, but they are only a tenth the size of their potential bidder, with a market valuation of just under 20 billion of dollars.
Uber has made few major deals since going public in 2019. It expanded into food and beverage delivery through acquisitions of Postmates by 2 thousand 650 million of dollars and Drizly by one billion 100 millionentered the transportation and logistics business by purchasing Transplace by 2 thousand 250 million and closed an agreement 3 thousand 100 million by Careema Middle Eastern freight forwarding firm.
The company also owns stakes in the autonomous car company Aurora and in the Chinese transportation request group DiDiand has already reached partnerships with the autonomous taxi service Waymoof Googleand Cruiseof G.M..
In August Uber achieved its first investment grade credit rating. Executives were interested in making sure that any offer for Expedia would not result in a downgrade to junk, said two people familiar with their interests.
In Expedia, Khosrowshahi He became one of the highest paid executives in EU. Uber compensated him for the 160 million of dollars in options he gave up when he left Expedia with options tied to him if he managed to raise his new employer’s valuation to 120 billion of dollars and stayed for five years.
The actions of Uber They fell immediately after going public, but have since risen, raising the value of stock options. Khosrowshahi to some 136 million of dollars at the end of February. Since then, the shares have already risen another 23 percent.
