Uber has reportedly sought advice from financial advisers regarding a potential acquisition of travel booking giant Expedia, according to a recent Financial Times report that cited unnamed sources. The news caused Expedia’s shares to surge by roughly 7% shortly after the report was published, while Uber’s stock dropped by nearly 3%.
This acquisition, if it materializes, would mark a significant shift for Uber, which has historically focused on ground transportation and food delivery services. With Expedia’s market capitalization nearing $20 billion, acquiring the travel site would be Uber’s largest deal yet and would see the company expand into new business territory. However, it wouldn’t be unfamiliar ground for Uber’s CEO, Dara Khosrowshahi. Khosrowshahi ran Expedia for over a decade before joining Uber, and he continues to serve on Expedia’s board, adding an interesting layer of familiarity to the potential deal.
Uber’s financial situation suggests it may need to secure external financing or utilize its stock to fund such a sizable transaction. As of June 30, Uber held $4.5 billion in cash on its balance sheet but had nearly $28 billion in total liabilities. Given these figures, outside financing could be key to making the deal feasible.
Despite the potential hurdles, Uber has recently been riding a wave of financial success. The company reported $1.9 billion in net income in 2023, marking its first annual profit. Uber’s food delivery service, Uber Eats, has played a vital role in this turnaround, generating about one-third of the company’s revenue and helping offset a pandemic-induced decline in ride demand. Uber’s stock has risen by 40% since January, resulting in a market capitalization of $172 billion, while Expedia’s shares have remained relatively flat.
At the time of writing, Uber has not commented on the reported acquisition discussions.
If this acquisition proceeds, it would be a defining moment in Uber’s journey toward diversifying its business model and tapping into the broader travel industry—a move that could significantly alter its competitive landscape.