In one of the most significant business sector moves, Uber Eats might just end up in Swiggy’s plate as the two companies are in talks and have reached the final stage of negotiations for Swiggy’s largest takeover till date.
The price tag for buying of the food-delivery arm of global cab service provider Uber – known as the Uber Eats India has been set to a share swap, with Uber receiving 10% stake of Swiggy, valued at $3.3 billion. As per reports, both the companies have reached the final negotiation stage and the deal is likely to be closed by the end of this month, or early next month. If and when inked, it will be Nasper-backed Indian food delivery giant Swiggy’s largest acquisition till date.
It will also be Uber Eats’ first ever divestment around the world, which is considered to be the part of Uber’s global cut down strategy to eliminate the arms that are in loss and prepares for a public offering at a possible valuation of $120-150 billion. In such situation, it is best for Uber Eats to be invested in local giants like Swiggy, rather than burning its capital behind the fierce race of offering the best among the same set of restaurants and customers; and hence bring some rationalism to the cash guzzling food deliver market that India has become.
For the South African media and internet conglomerate Naspers backed Swiggy, it has already been bullish in the Indian food-delivery market at a cost of burning about $40-45 million a month on its business. And it might be too early to claim this with a surety, the deal might help Uber in cutting its global losses and bring a bigger bite for Swiggy, but it is likely to make the market tougher to survive for rivals such as Info Edge-backed Zomato and FoodPanda, which is already running on the slow lane.