Expedia Stock Surges as Uber Explores Takeover Possibility

Expedia stock experienced an 8% surge in premarket trading on Thursday, while Uber stock faced a 3% decline following reports of the ride-hailing company considering a takeover of the travel platform.

Uber's Exploration of Expedia Takeover

According to The Financial Times, Uber engaged with advisors in recent months to explore the feasibility and potential structure of acquiring Expedia. The ride-hailing company aims to evolve into a comprehensive "super app" offering a wide array of services beyond transportation and food delivery.

Potential Merger Discussions

Sources familiar with the matter revealed that a third party initially suggested the idea of Uber acquiring Expedia. However, discussions regarding a possible merger are at a preliminary stage, and the realization of a deal remains uncertain. Notably, there has been no formal approach from Uber to Expedia, and active negotiations between the two companies are nonexistent.

Expedia's Value and Revenue

Expedia, renowned for its travel-booking platform along with properties like Hotels.com and Vrbo, holds a market value of nearly $20 billion as of Wednesday. This figure represents less than one-eighth of Uber's valuation, which stands at $172 billion. In the previous year, Expedia generated revenue close to $13 billion and operating income surpassing $1 billion, with over 350 million room nights booked through its platforms.

Uber's Strategic Acquisitions

Uber, with revenue of $9.9 billion and operating income of $652 million in 2023, has been actively expanding its services to realize its vision of a "super app." Acquisitions like Postmates and Transplace have enabled Uber to offer a diverse range of transportation options, in addition to restaurant and grocery deliveries. The company has also ventured into corporate logistics and advertising.

It is worth noting that Uber's CEO, Dara Khosrowshahi, previously helmed Expedia from 2005 to 2017 and presently serves as a non-executive director. This existing relationship suggests that any potential acquisition of Expedia by Uber would likely be an amicable arrangement rather than a hostile takeover.

For more details, you can refer to the original article on Business Insider.

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By: tmohamed@insider.com (Theron Mohamed)
Title: Expedia Stock Surges as Uber Explores Takeover Possibility
Sourced From: www.businessinsider.com/expedia-stock-uber-merger-dara-khosrowshahi-travel-transportation-super-app-2024-10
Published Date: Thu, 17 Oct 2024 11:49:44 +0000