Uber jumps 8% after it agrees to buy alcohol-delivery service Drizly for $1.1 billion
- Uber rose 8% on Tuesday after the company said it agreed to buy alcohol-service Drizly for $1 billion.
- The "Amazon for liquor" will become a wholly owned subsidiary under Uber once the deal goes through.
- Drizly's marketplace will eventually be integrated with the Uber Eats app, the companies said.
Uber rose 8% on Tuesday after the company announced a $1.1 billion deal to buy alcohol-delivery service, Drizly.
Upon completion of the deal, Drizly will become a wholly owned subsidiary of ride-hailing app Uber. In due course, its marketplace will be combined with the Uber Eats app, while it continues to keep its own standalone app, the companies announced.
The cash-and-stock deal is expected to close in the first half of 2021.
Drizly, sometimes referred to as the "Amazon for liquor," was founded in 2012 when the founders realized alcohol delivery was legal. According to the company, its journey began with a simple text from one friend to another:"Why can't you get alcohol delivered?" It caters to 1,400 cities in the US and has become a leading online marketplace for alcohol in North America.
"Wherever you want to go and whatever you need to get, our goal at Uber is to make people's lives a little bit easier," Uber CEO Dara Khosrowshahi said in a statement. "That's why we've been branching into new categories like groceries, prescriptions and, now, alcohol."
Uber said it expects over 90% of the consideration to be paid to shareholders in Drizly to consist of shares of Uber common stock, while the balance will be paid in cash.
Uber's stock was trading around $57.13 at the market open on Tuesday.