Expedia Group Inc.'s shares climbed by over 7% in after-hours trading on Wednesday and continue to show an increase of more than 7% in pre-market activity on Nasdaq. This surge follows a Financial Times report indicating that Uber Technologies Inc., a predominant player in the ride-hailing industry, has been evaluating a potential acquisition of the online travel enterprise.
Conversely, Uber's shares dipped nearly 2.7% during the extended trading session and are currently down 2.6%.
If successful, the acquisition of Expedia, valued at approximately $20 billion in market capitalization, would mark Uber's most significant acquisition to date. This move aligns with Uber's strategic efforts to diversify its business operations and enhance revenue streams.
Citing insider sources, the Financial Times noted that Uber has recently consulted its advisors about potentially bidding for Expedia, prompted by a third party's inquiry into the feasibility of such a transaction. It should be noted, however, that the interest is still in nascent phases.
At this juncture, Uber has yet to formally approach Expedia regarding the acquisition, and no discussions are currently underway between the two firms.
Uber's CEO, Dara Khosrowshahi, formerly served as Expedia's CEO from 2005 to 2017 and continues to hold a position as a non-executive director on Expedia's board.
Initially founded as a ride-hailing service, Uber has since broadened its portfolio to include food delivery, as well as train and flight bookings, corporate logistics, and advertising. This expansion has driven Uber’s market capitalization to $173 billion.
Since its initial public offering in 2019, Uber has acquired companies such as Postmates and Drizly, and ventured into the freight and logistics sector through acquiring Transplace.
Additionally, Uber holds investments in autonomous vehicle company Aurora and China's ride-hailing group DiDi. The company has recently collaborated with Google’s autonomous taxi service, Waymo, as well as GM's Cruise.
Dara Khosrowshahi was quoted earlier this week expressing Uber’s vision: "Anywhere you want to go in your city and anything that you want to get, we want to empower you to do so."
As the fourth-largest online travel enterprise, Expedia reported generating $12.8 billion in revenue in 2023. Their latest second-quarter results show profits rising to $386 million, or $2.80 per share, alongside a 6% increase in revenues to $3.558 billion.
In a February regulatory filing, Expedia announced plans to cut approximately 1,500 jobs to advance its organizational and technological transformation.
In pre-market Nasdaq trading, Expedia is valued at $161.90, marking a 7.33% increase, while Uber shares are priced at $79.77 on the NYSE, reflecting a 2.6% decline.
