Uber is reportedly contemplating a significant acquisition of the American travel booking platform, Expedia, for nearly $20 billion. This potential deal could mark Uber’s largest acquisition to date as the company seeks to diversify its business and explore new growth avenues.
According to sources cited by the Financial Times, Uber has been in discussions with advisors over the past few months regarding the feasibility and structure of this transaction, following a third party’s proposal to acquire Expedia.
One key focus of these discussions revolves around the role of Uber’s CEO, Dara Khosrowshahi, who previously served as CEO of Expedia from 2005 to 2017 and is still a non-executive director at the company. This background implies that any engagement with Expedia could be friendly, although Khosrowshahi would likely avoid participating in the negotiations.
However, insiders note that Uber’s intentions are still in the early stages and the deal may not materialize. One source indicated that Uber has yet to make formal contact with Expedia and is not currently in negotiations.
Khosrowshahi is a protégé of Barry Diller, Expedia’s non-executive chairman, who is known for facilitating a series of high-profile deals. Khosrowshahi spent seven years at Diller’s IAC, referring to him as “my great mentor.”
Neither Uber, Expedia, nor Diller has commented on the matter.
In recent years, Uber has expanded its business beyond ride-hailing to include train and flight bookings, food delivery, corporate logistics, and advertising, positioning itself as a “super app” similar to China’s multifunctional platforms like WeChat.
Expedia is currently the fourth-largest online travel platform, with reported revenues of $12.8 billion in 2023, benefiting from a post-pandemic travel boom. However, the company recently warned of a potential decline in travel demand.
Uber’s stock has surged by 85% over the past year, raising its market value to $173 billion, which enhances its acquisition capabilities. The company reported its first annual operating profit in February. Meanwhile, Expedia’s stock has risen by over 50% in the last year, but its market value remains below $20 billion, just one-tenth the size of Uber.
Since 2019, Uber has engaged in relatively few large transactions, including acquiring Postmates for $2.65 billion and Drizly for $1.1 billion, expanding into food and beverage delivery. The company also acquired Transplace for $2.25 billion to enter the freight and logistics sector and finalized a $3.1 billion acquisition of the Middle Eastern ride-hailing service Careem.
Additionally, Uber holds stakes in the self-driving company Aurora and China’s ride-hailing giant Didi Chuxing, and it has recently established partnerships to operate self-driving taxi services with Waymo, a subsidiary of Google, and Cruise, owned by GM.
