Photo credit: Uber

According to a report from the Wall Street Journal [paywall], ride-hailing company Uber has approached food delivery competitor Grubhub with a takeover deal, at a time when the coronavirus pandemic has led to an outsized surge in demand for food delivery. According to the Journal, a merger, as opposed to an outright acquisition, is also being discussed. As of now, there’s no guarantee for such a deal being finalized but in a case where it does, it’s bound to reshape the U.S. food delivery industry, as Uber Eats, Uber’s food delivery service, and Grubhub represent the 2nd and 3rd biggest food delivery services in the U.S. according to data from Second Measure. In a case where they combine, a unified company would become the biggest food delivery service in the U.S., eclipsing current market leader DoorDash.

According to reports, Uber’s proposed acquisition deal is all-stock as opposed to a cash payment or a combination of both cash and stock. Uber pursuing an all-stock deal would make sense, as the company would be looking to conserve its cash pile in the midst of a pandemic that although has boosted its food delivery business, has also significantly affected its core ride-hailing business. Uber, which recorded $3 billion in losses in the first quarter of this year, reported having a $9 billion cash pile also at the end of the first quarter. For the quarter, Uber Eats recorded $819 million in revenue, up 53% year-over-year. Grubhub, on the other hand, posted $363 million in revenue in the first quarter of this year.

As of Tuesday morning, Grubhub had a market value hovering at $4.4 billion. On the heels of Uber’s reported takeover interest, its stock has soared more than 30% during trading on Tuesday.