Uber Acquires Alcohol-Delivery Service Drizly for USD 1.1 Billion

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Uber Acquires Alcohol-Delivery Service Drizly for USD 1.1 Billion

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 Uber Acquires Alcohol-Delivery Service Drizly for USD 1.1 Billion

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Summary

  • The deal is expected to give huge boost to Uber’s market position along with other services.
  • Uber stocks were priced at around USD 56 a share at close on Tuesday.
  • Covid restrictions have opened huge opportunities for delivery services providers.

Uber Technologies Inc. has acquired the Boston-based alcohol-delivery service Drizly for a whopping USD 1.1 billion, dubbed as one of the largest deals to date in this segment in the US.

The deal is expected to give a big boost to Uber’s position in the market along with its other delivery services. Demand for alcohol-delivery services has gained ground in the US after much of the public alcoholic joints have been shut or permanently closed due to the COVID-19 restrictions.

And Uber is keen on taking a commanding share of this lucrative market. The purchase, which has been executed in stocks and cash, would help the company to take a leading position in the market in the future.

On Tuesday, stocks of this NYSE listed company were trading at around USD 56 a share at the close. 

Deal to Give a Market Lead

The company has ramped up its home-delivery services after the pandemic hit hard on its ride-hailing business, which has been its primary enterprise during regular times.

It has been a major strategic shift in its business, which became apparent after it bought the rival food-delivery company Postmates Inc. in a USD 2.65 billion deal.

The move will help consolidate the food-delivery platform along with its brand Uber Eats in the US market. The deal made Uber the second-largest food-delivery company in the US after DoorDash Inc.

Both companies have hugely benefited from Covid restrictions.

Last year, Uber purchased the start-up Cornershop to launch its grocery-delivery service in the US and Canada. DoorDash, on the other hand, forayed into delivering medicines and cleaning materials at people’s doorsteps.

As restrictions forcing changes in people’s habits, these companies stand to gain the most compared to their peers in other sectors during the pandemic.

According to an estimate, revenue from online alcohol sales had grown by 80 percent in the US last year.  However, China remains the world’s largest online alcohol market.

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