zomato uber eats acquisition case study pdf

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Acquisition by Zomato of Uber Eats: Analysis

This article is written by Abhishek Dubey , a BBA.LLB student from Chanderprabhu Jain College of Higher Studies and School of Law. This article discusses the acquisition of Uber Eats by Zomato and also various concepts related to that acquisition such as the all-stock deal that has been practised by Zomato and how it is different from an all-cash deal. 

Table of Contents

Brief History of Zomato and Uber Eats

UberEats parent company was founded in 2009 by Garret Camp and Travis Kalanick. The company started its food delivery in August 2014 with the launch of UberFRESH in California. The platform was renamed as UberEats which started its operation in London in the year 2016. In August 2018, UberEats started its delivery fees depending on the range or distance of the order placed. In the UK and Ireland, the delivery fees are based on the value of the order. In November 2019, UberEats announced that it will deliver the food through drones by summer of 2019. On January 21 Zomatoo acquired UberEats in the all-stock acquisition, with UberEats gaining 9.99 per cent stake in Zomato.

Zomato is an Indian restaurant and food delivery startup founded in the year 2008 by Deepinder Goyal. Zomato offers its services in 24 countries and in 10,000 cities. In 2011, Zomato expanded its delivery across India in Delhi NCR, Mumbai, Banglore, Chennai, Pune, Kolkata etc. 

Zomato has acquired 12 startups globally. In July 2014 Zomato acquired the startup Menu Menia. Zomato acquired Tongue stun in September 2018, a Bengaluru startup, for cash and stock deal of 18 million dollars. Zomato also acquired Tech Angle startup in Lucknow that worked on drones.

Zomato acquired stocks of UberEats for a deal value of 350 million dollars on 21st January 2020.

Zomato’s motive behind the acquisition of Uber Eats

• Large acquirers acquire a smaller company so as to provide speedy and efficient services at a lower cost. Zomato is a larger organisation than Uber Eats and both operated in the same line of business but Uber was not able to influence the market. 
• This will help Zomato gain competitive benefits from Swiggy as the combination of Zomato with Uber Eats will help increase its share to more than 50 per cent of the market, pulling it ahead of Swiggy.
• Zomato will also have greater negotiating power with restaurants which will reduce the losses. 
• The discussion was going with the soft bank to consider Swiggy as Food Tech or Food Hub but now, after the acquisition of Uber Eats by Zomato, Zomato will become the Food Tech or Food Hub in the food market.

Why Uber agreed to sell

Uber was running in loss for a few years and its CEO Dara Khosrawasahi said that the company will only operate in the market where it will be in the No. 1 position whereas, Zomato and Swiggy were ahead of UberEats in India, which is why we sold it to Zomato. It has pulled back its business from Vienna and South Korea because it was running in losses and it was not in number 1 position.

Uber was a competitor of Swiggy and Zomato which already have well-established market relations with local restaurants and they are able to respond quickly to changes in the market such as technological change, etc.

As per industry estimates, UberEats has 5 per cent of overall global booking in online bookings for food delivery. In December 2019 UberEats made a huge loss of 107 million dollars.

The deal also gives Uber 9.99 per cent of ownership in Zomato which will be valued at 3 billion dollars. This deal will give Uber a chance to recover at least the initial investment in India. Moreover, the purchase price that is given by Zomato in buying UberEats can be used by UberEats in growing other businesses. 

How the deal will affect the customers, employees and restaurants

Swiggy and Zomato will try to attract the customers after the acquisition of Uber Eat with discounts, offers and subsidies and this will be their ongoing strategy. Restaurants who are already with Zomato will give a gold offer to their customers such as dining out and delivery. But restaurants will lose their bargaining power. Also, 100 employees will be reallocated or laid off due to acquisition.

Why Zomato and Uber Eats agreed to go for stock acquisition

This type of acquisition involves the purchase of a business or acquiring a business by giving them shares. Zomato agreed to give 10 per cent of shares to Uber Eats and acquired 100 per cent of stocks. In this type of acquisition, the acquirer assumes all liabilities and assets of the business and the buyer can also contractually allocate the liabilities. The cost of acquisition in case of stock acquisition or stock deal is inexpensive and easy to execute. Also, no tax is deductible on goodwill.

Mistakes made by Uber Eats

Increasing the frequency of audience.

UberEats recognises Alia Bhatt as its brand Ambassador. It is the only food delivery app which brings celebrities in its communication. In January 2019, it launched a campaign called Everyday Moments. This was the largest viewed video on Youtube; around 50.3 million Indians watched this on Youtube. 

2. Late mover disadvantage

One of the main reasons for the failure of UberEats was that it could not do proper research on the need for people. To create a distinct identity, UberEats should have followed the discounting strategy and other policies for its customers to acquire and retain them. In this way, UberEats could have gained more views from its customers.

3. Developing a distinct identity

Uber should have developed a distinct identity from others in its food delivery system and it should have introduced various discounts and allowances in its food. If this would have been done by UberEats then the situation of selling themselves to Zomato would not have occurred. 

The all-stock deal between Zomato and Uber Eats and how it is different from the all-cash deal

The terms ‘all-cash’ and ‘all-stock deal’ is used in the transaction of merger and acquisition. The difference between merger and acquisition is that in a merger, a merger company merge with each other and in the acquisition, one company acquires another company. In the merger, the companies merge with each other and a new company is formed and in the acquisition, the acquiring company starts working in the name of the acquired company. Such deals can occur in either all-cash basis or all stock basis.

All-cash basis basically involves the purchase of the company from cash. In an all-cash deal, the equity portion of the balance sheet of the parent company remains unchanged. But in an all-stock deal, the equity portion of the balance sheet gets affected. All-cash merger and acquisition deals are those which occur without any exchange of stock or equity and this is because trading happens when the trading company purchases shares of the other company in cash. This type of situation arises when the company acquires an even larger company that has a large amount of cash, so the financial situation of the companies does not get directly affected. However, the cash deal method has a lot of drawbacks as there are a lot of tax deductions. 

Factors affecting mergers and acquisitions are changes in technology and other internal and external environments. But there is a trend for cash deal in mergers and acquisitions and 60 per cent of mergers and acquisitions are on a cash basis and the deals in cash basis are of large value too. But this shift of trend has disadvantages for shareholders of both the companies; acquiring and acquired company. 

In cash deal, the duties, rights and obligations are clear cut such as transfer of ownership, but in an exchange of shares, it is difficult to determine the buyer and seller of both the parties. There is a large ambiguity as to which business is being acquired and by whom. Also, there is a possibility of fraud because in most of the cases, the acquired company ends up owning most of the shares when a share is acquired for the exchange of stocks. But the decision to pay in shares rather than cash also has an impact on the return of shareholders because the number of shares is reduced and share price is affected. In an all-stock deal, the shareholders of acquiring company receive shares rather than cash.

Illustration:  An investor owns 10,000 shares in a beverages company. When the company is acquired by a larger company, the universal company shareholders will receive compensation for their share of ownership in the acquired company. The all-stock deal may be used when shareholders of the target company prefer to obtain ownership in the acquiring company rather than a cash settlement. This may also be initiated by acquiring a company which wants to buy out the investors of the target company but do not have sufficient cash assets. All-stock deals can be favourable when the merger is successful and result in acquiring companies. When there is a decrease in value of share then the all-cash deal is riskier than an all-stock deal.

Issue of shares for consideration other than cash

When an asset is acquired by the company, the payment to purchase those assets can be made by cash or by the issue of a share. When a share is issued against the purchase price, it is known as the issue of shares for consideration other than cash. 

Determination of purchase price

Sometimes one company purchases another company and takes over all cash, assets and bank balances, liabilities of third parties, etc of the other company. Seller is called the vender and purchase price payable to vender is called consideration. 

The purchase price is determined:

On the basis of the amount payable

For the determination of purchase price, the sum of the value of the shares to be issued and cash payable becomes the amount of consideration.

On the basis of the number of shares

For the determination of purchase price, the product and number of shares and the value of the shares is given. The shares may be issued at a discount, at par, at premium etc.

On the basis of assets and liabilities

For the determination of purchase price, the difference between assets and liabilities along with their resultant value is taken into consideration.

Issue of shares for purchase of assets

The company can issue shares in consideration for acquiring the assets of the business. If a company purchases assets and assumes liabilities then it is known as the purchaser of the business.

Promoters are the ones who do the research, technological changes and other work when the shares are issued to them. It is known as an issue of shares to promoters.

Issue of shares for consideration as per Companies Act

Securities can be allotted for consideration other than cash. There shall be a PAS 3 form attached for allotment of securities, along with a copy of the contract duly stamped. In its contract, it should contain the details of securities which have been allotted to the shareholders, along with the contract of sale relating to property or consideration other than cash to be submitted to the tribunal. If the contract has been reduced to writing, it shall be deemed to be an instrument within the meaning of the Indian Stamp Act 1889 Section 2(a).

Issue of shares for consideration under FDI consolidation

This topic is very important because the investors of Uber Eats are foreigners. The issue of shares to foreign investors is brought under FDI policy 2011 . This regulation was brought to check the issue of money laundering in a number of cases, where shares are issued to foreign shareholders. Prior to 2011 FDI policies, Indian companies were allowed to issue equity convertible securities under automatic route only if there was cash consideration.

Steps required for government approval

In case of issue of shares for capital goods.

• Any import of capital goods must be made in accordance with the export/ import policy issued by the Government of India, defined in Directorate General Of Foreign Trade and Foreign Exchange Management Act.
• Independent valuation has to be done by the third party entity excluding second-hand machinery.
• The application should indicate beneficial ownership clearly of both acquiring and the acquired company.
• The application must be completed within 180 days in all respects. 

Issue of share in pre corporation expenses

• Submission of foreign inward submission certificate for remittance of funds by the overseas promoters for expenses incurred.
• Verification and certification by the statutory auditor for the incorporation of expenses.
• Payment to be made to the foreign investor directly or through the bank account under FEMA regulation. 

Zomato acquired Uber Eats for an all-stock acquisition deal. This deal will provide great discounts to customers and it will be the most beneficial to them. The stock deal is done by the companies operating in the same line of business. Resulting in Zomato becoming number one in food marketing and food supply or in other words as the megastar of the food business. Moreover, Uber Eats can invest their money in other growing business.

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Law School Policy Review & Kautilya Society

Clear. current., zomato-ubereats acquisition – the changing dynamics of combination assessment.

Sanskar Modi, Akshat Shukla

Are Indian Anti-trust laws equipped to deal with Nascent Acquisitions? This piece analyses the current target exemption thresholds under the Indian competition regime to identify the anti-competitive implications of excluding the CCI’s investigation into such exempted combinations – to propose a deal-value oriented exemption framework that mitigates such anti-competitive effects.

Introduction

The Zomato-Uber Eats deal which took place in February, 2020 raised several pertinent questions of law in the Indian Antitrust regime. Food delivery giant Zomato’s acquisition of Uber Eats should ideally be scrutinized under the Section 5(a) of the Competition Act, 2002 (“the Act”) but it escapes combination assessment by availing of the target exemption or de minimis threshold exemption under the Act. This case prompted a critical revision of the current existing legislative framework on combination assessment, as the CCI has initiated a probe in this non-notifiable deal despite the de minimis exemption.  This blogpost deals with three major aspects of antitrust law vis-á-vis the present combination – first , the analysis of the current thresholds, target exemptions and ex-post reviews as per which the combinations are assessed considering the legislative intent behind the existence of such thresholds; second , the need to consider the challenges that the current thresholds fail to address which leads to increased scope of anti-competitive practices in different markets; and, third , India’s current stand with respect to the assessment of non-notifiable transactions and the steps that can be taken, following in the footprints of US and EU jurisprudence, to tackle the issue at hand.

By way of elaboration, the thresholds enlisted in Section 5 of the Act for scrutinizing combinations have been subjected to much criticism in the past for several reasons. One of the most important reasons for this criticism is the difference in the quantification of assets and turnover across varying industries. The following sections deal with the conundrum of an anti-competitive combination even which does not cross the notification threshold of the Competition Commission of India (‘ CCI ’) under Section 6 of the Act. The Zomato Uber Eats deal is a curious case which may become a pioneer in steering the competition regime of India towards a new regulatory mechanism of combination assessment which extends even to non-notifiable transactions. The EU and US jurisprudence already provides for the residuary powers with competition regulators to assess combinations which are below existing thresholds. The Indian regime particularly follows these jurisdictions in framing its laws and therefore, it would only be a welcome step if such a mechanism is introduced in India.

The Indian Regime on Regulation of Combinations

A combination is the entity that is formed after a merger or an acquisition involving more than one corporate entity. However, under Section 6 a combination needs to be notified to the CCI only if it crosses the thresholds of assets or turnover mentioned in the section, in the preceding financial year. The assets or turnover are inter alia calculated by ascertaining the combined value when the entities start operating together. The thresholds for notifying combinations were last revised in 2016. Acquisitions, amalgamations or mergers are required to notify CCI about the deal if the assets of the combination are valued over Rs.2000 crores and/or they have a turnover of Rs.6000 crores. If a combination fulfills either of the conditions, the merger needs to be notified under Section 6 of the Act.

Further, it was realized that there are several transactions where a big entity acquires small startups and these deals are generally not capable of causing appreciable adverse effects on competition. In order to reduce the burden of assessing such transactions on the CCI, the de minimis threshold or target exemption mechanism was notified by the Central Government under Section 54(a) of the Act. Under this exemption , if the target enterprise has less than Rs.350 crores in assets or turnover of less than Rs.1000 crores then even if the combining entity crosses the threshold, the combination need not be notified under Section 6. If all such transactions were to be notified, the escalated bureaucratic burden over the CCI could, causing those combinations which could adversely affect the competition to escape the scrutiny of CCI due to their assessment being delayed.

Backdrop of the Zomato-Uber Conundrum

In the Indian context, the present debate over these thresholds stems from the Zomato-Uber acquisition that culminated in January, 2020 but has since then been entangled in antitrust issues. CCI first inquired about the acquisition through a letter in February, 2020 and Zomato subsequently claimed to have shown all the relevant documents. In December 2020, CCI sent a show cause notice to Zomato seeking an explanation for not notifying the Uber Eats India Asset Acquisition for its review and approval under Section 6(2). CCI has alleged a violation of Section 43A of the Act which deals with mergers that were not filed for review before the CCI even though they crossed the thresholds. Zomato has claimed in its Draft Red Herring Prospectus dated 27 th April, 2021 that it filed a response to the show cause notice in February, 2021. Further, it has also requested an oral hearing before CCI to prove that the transaction is non-notifiable under the purview of the Act. 

If the Zomato-Uber deal was actually non-notifiable and the same was ascertained by CCI through its letter in February 2020 then the show cause notice of December raises several questions on the powers of CCI to review a combination that does not qualify the requisite threshold. Further, all of this comes into play when the Draft Competition Amendment Bill of 2020 (‘the Draft Bill ’) is yet to be approved by the Parliament. This bill has several provisions that directly address the aforementioned issues and this interplay of the Zomato-Uber deal and the Draft Amendment Bill shall also be discussed in detail in the subsequent heads.

Analysis of the Legislative Intent behind Current Thresholds 

As discussed earlier, the Indian thresholds are based on the turnover and assets of the combining parties which subsequently determines whether a transaction will be notifiable to CCI. Thresholds were incorporated in order to prevent the merger control regime from becoming unduly onerous. The prior approval for all the mergers would lead to delays and unjustified bureaucratic intervention. The intention behind incorporating thresholds was to scrutinize those combinations only which have the potential to affect the competition in the market. It was believed that companies of lesser asset value post merger focuses more on establishing networks in the initial years rather than revenue generation and thus, these companies are not in a position to cause an appreciable adverse effect on competition in the market. 

Regardless of the fact that the bureaucratic burden on CCI increases because of such small valued transactions getting notified, it is important to address the importance of Section 20(1) and its proviso which gives ex-post review powers to CCI for one year from the initiation of the combination. It states that CCI, upon its own knowledge or through information, can inquire or investigate about a combination if it causes or is likely to cause an appreciable adverse effect on the competition. Therefore, it sets a contrast with the assertion that only notifiable transaction should be assessed by the CCI and the question that whether there is a need to assess non-notifiable transactions gains prominence. Further, the legislative intent in the draft bill of 2020 also shows positive steps in diversifying the threshold mechanisms. All of these propositions have been discussed in detail in the next segments. 

Assessment of non-notifiable transaction and its implications

The CCI’s probe in the Uber Eats-Zomato deal coupled with the introduction of ‘deal value thresholds’ in the draft bill has broached one of the most pertinent questions which is that whether the competition regulators in India are fairly efficient to avert the acquisitions of “Nascent Competition” & “Killer Acquisitions”.  The term nascent competition mainly denotes a particular category of product or technology that is relatively new and has the ability to be a notable competitor in the future whereas killer acquisitions refer to the acquisition of nascent targets in horizontal markets to ‘discontinue’ or ‘kill’ their ongoing projects. Nascent acquisitions such as Freecharge-Snapdeal and Whatsapp- Facebook are amongst the many other acquisitions which escaped antitrust scrutiny in India due to non-fulfillment of thresholds and hence these instances clearly manifest the ineptitude of the current merger control regime to capture “Killer Acquisitions”. In the light of these emerging issues, it becomes pertinent to comprehend the Indian standpoint of merger control.

Changing Contours of Merger Control – Where Does India Stand?

The aggressive acquisitions of novice potential competitors by established players across the globe in the last few years have challenged the competition authorities to enact and amend legislations which can fill this enforcement gap of scrutinizing even the non-notifiable transactions. Antitrust enforcement agencies across jurisdictions have taken the effort to address the nuances of the anticompetitive impact of nascent acquisitions and the scope of improvement in the antitrust policy. 

Germany & Austria were among the first countries which enacted transaction based thresholds in 2017 to deal with such loopholes. US merger control regime has also started showing flexibility for ex-post assessment of mergers while dealing with combinations resulting out of nascent acquisitions. This implies that even non-notifiable transaction can be called for an investigation under the US Antitrust laws. The European Commission ( EC ) also has a mandatory notification system based on thresholds but even if a transaction does not fulfill the threshold requirement, EC can review a transaction if it is notifiable under the national competition law of minimum of three member states.  Similar flexibility can also be observed in the UK antitrust regime under which the Competition & Market Authority ( CMA ) uses share-based tests in addition to turnover based thresholds: as per the share-based tests, authorities can review a transaction if the parties thereto have a share of supply exceeding 25% or the transaction results in an increase in the supply share above 25% in the UK.

When this changing contour of merger control is looked at in India, the Indian competition jurisprudence is found to lack substantive legislation on assessing non-notifiable transactions. However, the challenge of nascent acquisitions, most significantly in the digital economy, has not escaped the CCI’s notice.  The report of the Competition Law Review Committee extensively discussed digital markets where enterprises having lower turnovers escape the CCI’s radar. To deal with such loopholes, the report recommended the introduction of Deal Value Thresholds (‘ DVT ’) and accordingly, the Draft Bill provided power to the central government in consultation with CCI to prescribe other criteria in addition to those mentioned in Section 5 such that fulfillment of such criteria can deem any transaction to be a combination under Section 5. 

Admittedly, in its present form, the CCI does not possess any residuary power to access non-notifiable mergers even if the potential competitive harm is evident. The current legislation requires the implementation of DVT apart from providing some residuary power to CCI to assess objectionable non-notifiable combinations.

Conclusion: The Way Forward

It is conspicuous that the current parameters of merger control regime in India are not sufficient to prevent combinations from causing an adverse anti-competitive effect. It is high time that the competition watchdogs take cognizance of the contemporary and dynamic marketing strategies undertaken by dominant players in the market. The introduction of DVT in the Draft Bill is undoubtedly a welcome step but it fails to include some of the remarkable international developments & suggestions such as assessing a merger using an “ expected harm ” test and “ex post review” of selected combinations that escape scrutiny of the regulators or which are otherwise non-notifiable. The implicit force of law should be replaced by express powers given to CCI so that the regulation mechanism for assessing combinations can be strengthened. The Zomato case can be a trigger point in bringing about revolutionary change in the Indian merger control regime as it comes at a point where the 2020 Draft Bill is on the verge of being enacted.  The inclusion of Deal Value Thresholds and their implementation in several industries would require a complete overhaul of the present structure of thresholds; thus, ultimately only competition authorities can change the status quo upon genuine introspection.

The authors are third year students at the National Law Institute University, Bhopal.

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UberEats and Zomato Case Study

On 21st January 2020, the only news that was visible was Zomato bought Uber India. The was in progress since June 2019 and it finally reached its destination for $350M i.e. RS. 2,485cr. the deal was an all-stock- transaction. This means that Zomato did not pay the monetary prize for the deal but gave an equal share in the company. UberEatsnow holds 9.99% of the share in Zomato. People trying to operate UberEatswere redirected to Zomato’s page. Although Zomato will not revive the employees from Uber Eats, this does not include delivery boys as they are not employees but a partner.

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Zomato was introduced to India in the year 2008 by Deepinder Goyal. In 2019 Zomato was located in over 24 countries and 10,000 cities. On the initial stage of Zomato Info Edge India was the major investor and shareholder with a 57.9% share in Zomato. Info Edge India was the major shareholder in Zomato till 2018; later in the third round of funding, Zomato raised over $210 million from Alibaba’s payment affiliate Ant Financial. Ant Financial received an ownership stake of over 10% of the company as part of the round, which valued Zomato at around $2 billion. Zomato had also raised an additional $150 million also from Ant Financial earlier in 2018. Zomato has acquired around 12 startups globally since 2014. This acquisition includes a startup business that provided drones for an undisclosed amount; to this Zomato had to say this will help them in improving technically by delivering food through drones.

UberEatswas introduced by its parent company UBER in the year 2014. Uber Technologies most commonly known as UBER is an American multinational ride-hailing company offering multiple services from traveling from one place to another. UberEatswas introduced in India in the year 2017 and by the end of 2018, it was already in conversation with Swiggy to takeover uber eats. Uber had faced a huge loss of $1 billion in the previous year as of November and cut a hundred jobs. Letting UberEats go would help Uber recover their losses in the market. It is observed that Uber has been in talks with other organizations to take over its loss-making company in other nations too.

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UberEatswas third in the race of food delivery apps in India. Swiggy was and still is a huge market competitor. While Swiggy receives daily orders of 1.4 million every day; Zomato receives 1.2 million; whereas on the other side UberEatsreceived only 4 lakh orders per day. Successful completion of this deal will be led to an increase in the market share of Zomato up to 50-55%. Also, UberEats had did not have much of the northern market but it had around 30% market hold on the southern side. It is assumed by the experts that this deal will result in 90% of UberEats customers switching to Zomato but, there is a higher chance of switching to Swiggy.

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Acquisition Of Uber Eats By Zomato – The Flaw In The Plan With Deep Discounting

Contributor.

Yet another business gets hit by deep discounting! Clearly, this strategy can help penetrate and acquire market share only as long the wallet stretches. Uber Eats was no exception to this; even two attempts in this space by Ola (namely, Ola Café and Food Panda) were unsuccessful, with the latter moving to cloud kitchen services, after realizing the restricted penetration potential in the food delivery business.

With a customer base that remains loyal only to discounts, stiff competition, and lack of service differentiation, the food delivery industry seems on its way to reaching the last ones standing and driving out smaller players. While operational costs are ever-surging (due to increasing discounts, high cost of customer acquisition, time and incentive cost of onboarding an extensive network of restaurants, high investment in the delivery fleet), the revenues are nowhere near reaching any profitability.

With the all-equity deal of Uber Eats with Zomato (where Uber obtained a 9.9% stake in Zomato for the entire Uber Eats business), Zomato and Swiggy are the two largest players still standing in the Food Delivery business.

A high-level look at a couple of the sectors where players used deep discounting clearly shows the importance of deep pockets, product differentiation and value-addition, forward and backward integration, and eventual market consolidation.

Evident from players across industries, like Snapdeal, Meru Cabs, and Vodafone, who have lost a substantial market share due to the absence of such differentiation (or integration), staying afloat in the cost-sensitive Indian market requires strategic and tactical agility. Not only did Uber Eats enter the market late (in mid-2017), but it also didn't differentiate itself; it focused only on the deep discounting strategy for market coverage, which proved to be unsustainable. Uber Eats had been looking to exit the market for a year and was in advanced discussions with Swiggy, which didn't materialize due to differences in valuation estimates and tax implications.

The two surviving Food Delivery players have systematically differentiated their offerings. Zomato has several services — food blogging, ads, dining, Zomato Gold, etc., while Swiggy is considering grocery and non-rush-hour delivery as its long-term goal, with Swiggy Stores.

This deal clearly demarcates a trend of how it is the imperative of any company to add value, integrate other business streams, and to go beyond deep discounting, to gain and maintain an edge in the market. Let us now wait and watch how the last standing two giants of the food delivery business try to outwit each other in the future!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Indian Journal of Law and Legal Research ISSN: 2582-8878 | PIF: 6.605 Indexed at Manupatra, Google Scholar, HeinOnline & ROAD

Indian Journal of Law and Legal Research

• Aug 7, 2021

Analysing Mergers And Acquisitions In Light Of The Acquisition Between Zomato And Uber Eats

Analysing Mergers And Acquisitions In Light Of The Acquisition Between Zomato And Uber Eats: A Critical Analysis

Anshu Singh, Amity University, Kolkata

The Indian Companies Act 2013 has brought in significant changes in the merger and acquisitions (M&A) regime. With the introduction of new provisions allowing cross border mergers and global integration -- both inbound and outbound, enhancing disclosure norms and fast track mergers, increasing protection to minority and investors, incorporating business friendly corporate laws, etc., India has not only improved its world ranking in the ease of doing business, but the changes have also been applauded by lawyers and corporate across the world.

The Author, through this research work tries to analyse the provisions of the Indian Companies Act, 2013 relating to M&A and their impact on the mergers and acquisitions. She further focuses on the famous acquisition in India of the year 2020, the merger of Uber eats with Zomato pursuant to the Companies Act 2013, for an all stock acquisition deal, to help Zomato gain competitive benefits from Swiggy and greater negotiating powers with the restaurants. She further ventures to analyse the impact of the acquisition on Zomato and its market share in the food-tech space in the presence of its biggest competition, Swiggy.

For this research paper, the Author will be adopting the doctrinal method to proceed with her research work. Primary resources the author will be referring to in the course of her research work will include books and journals. Other sources like articles and the like will be accessed online through the use of online databases. The author will limit her research work to the resources available on the internet. Also, since the merger of Uber Eats and Zomato is a recent event, the post merger data relates to only a few months and hence the study relates to a very short period after merger.

Keywords: Mergers, Acquisitions, Cross Border Merger, Zomato, Uber eats, Food tech space.

• Volume II Issue II

Abbreviation : IJLLR

ISSN: 2582-8878

Website: www.ijllr.com

Accessibility: Open Access

License: Creative Commons 4.0

Submit Manuscript: Click here

​All research articles published in The Indian Journal of Law and Legal Research are fully open access. i.e. immediately freely available to read, download and share. Articles are published under the terms of a Creative Commons license which permits use, distribution and reproduction in any medium, provided the original work is properly cited.

Disclaimer:

The opinions expressed in this publication are those of the authors . They do not purport to reflect the opinions or views of the IJLLR or its members. The designations employed in this publication and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the IJLLR.

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Zomato Case Study: History, Valuation, Product, Services & Growth

Zomato is an Indian restaurant aggregator and food delivery company that was founded in 2008. Initially, the company started as a simple platform to help people discover new restaurants in their area, but over time it has evolved into a major player in the food delivery industry. Today, Zomato operates in more than 25 countries and has a user base of over 90 million.

Background: Zomato was founded by Deepinder Goyal and Pankaj Chaddah in 2008. The idea for the platform came about when Goyal and Chaddah were working as management consultants and found themselves frustrated with the lack of good restaurant options in their area. They decided to create a platform that would allow users to discover new restaurants based on their location, cuisine, and price point.

Initially, Zomato operated as a simple directory of restaurants, but over time it began to add more features such as user reviews, ratings, and menus. In 2011, Zomato launched its mobile app, which allowed users to access its services on-the-go.

Zomato’s Business Model: Zomato’s business model is based on a combination of restaurant discovery and food delivery. The company generates revenue through various means such as advertising, commissions on food orders, and subscription services.

Zomato has a two-sided platform that connects restaurants with customers. Restaurants can list their menus and prices on the platform, and customers can use the platform to discover new restaurants, read reviews, and place orders. When customers place orders through the platform, Zomato takes a commission on the sale.

Zomato also generates revenue through advertising. Restaurants can pay to have their listings promoted on the platform, which can help them reach more customers.

Finally, Zomato has introduced a subscription service called Zomato Gold, which gives users discounts on food and drinks at participating restaurants.

Challenges Faced by Zomato: One of the biggest challenges faced by Zomato is the intense competition in the food delivery industry. Zomato competes with other major players such as Uber Eats, Swiggy, and DoorDash.

Zomato also faced challenges in expanding into new markets. In some countries, such as China and the United States, the company struggled to gain a foothold due to strong local competition.

Another challenge faced by Zomato was managing its operations during the COVID-19 pandemic. The pandemic led to a surge in demand for food delivery services, which put a strain on Zomato’s logistics and delivery infrastructure.

Successes of Zomato: Despite these challenges, Zomato has achieved significant success in the food delivery industry. In 2021, Zomato went public with a valuation of over $9 billion, making it one of the most successful IPOs in Indian history.

Zomato has also expanded its operations to more than 25 countries, making it a truly global player in the food delivery industry.

In addition, Zomato has been successful in diversifying its revenue streams. The company’s subscription service, Zomato Gold, has been particularly successful, with over 1.4 million subscribers in India alone.

Conclusion: Zomato’s success can be attributed to its innovative business model, its focus on customer experience, and its ability to adapt to changing market conditions. As the food delivery industry continues to grow and evolve, Zomato is well-positioned to continue its success and expand its reach into new markets.

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A Comprehensive Uber Eats Case Study- 2023

Nowadays, when we are hungry, do we always cook?

Not always, right?

Instead of thinking about what to cook, most of us search for our mobile phones.

Just take our mobile and order our favorite food from our favorite restaurants.

The answer is through food delivery apps.

In this Uber Eats case study, we will discuss one food delivery app that has gained popularity since its invention. It is none other than “Uber Eats.”

We will learn about the Uber Eats case study, digital marketing strategy, and Uber Eats competitor analysis.

There was a time when eating outside was a sort of social gathering. While it is still the same for many, eating out has become more of a necessity.

It could range from a cup of relaxing tea to a craving for a sweet. Now that necessity is delivered to one’s doorstep.

Although people nowadays depend a lot on food delivery apps. How did the idea of ordering food originate?

This article summarizes how online food ordering existed, the major players in this field, and the Uber Eats case study and marketing strategy.  

How did the Food Delivery Idea Emerge?

Uber Eats case study reveals that this service began during World War II.

Then, people did not have a kitchen or home appliances, so they did not have other cooking options.

Food delivery services started spreading to the United States and Philadelphia from the UK.

They supplied food to the needy and those who were at home.

Also, the government ensured that each house was filled with food so nobody stayed hungry. This method spread fast to other parts of the country, including New York and Columbus.

When its benefit began spreading to other parts of the world, others also jumped into this field. Then, in 1952, Australia started its first food delivery service.

Modern Food Delivery System

By then, restaurants had introduced toll-free numbers so customers could call to order food without charges.  With time, the idea of a food ordering system was appreciated by many.

This way, customers could contact the restaurants and enjoy their favorite food delivered to their homes. It led to the invention of online food ordering and delivery services.

Today, there is hardly any country where we will not find a food ordering and delivery service. Moreover, as more and more restaurants join the race, the online food ordering market expands.

As a result, online food ordering and delivery systems have started gaining fame over the previous years.

Digital Age Driving the Growth of Online Food Ordering Services

Online food ordering and delivery popularity is a significant aspect of the digital age culture. We could find Millennials considering online food ordering quite common in recent times. Due to the increase in online customers, the Uber Eats market has grown.

However, most traditional businesses have embraced these trends and moved online despite the growing demand.

With the advent of modern technologies, the food industry gained several new investors regularly.

The online food delivery service is booming with popular apps like Uber Eats and other meal delivery services. Forbes predicted that this industry will have annual sales of around $365 billion worldwide by 2030.

The online food delivery industry has grown immensely over the past five years.

Headed by platform-to-consumer services, such as DoorDash and Uber Eats, online food delivery service has expanded, including takeaways, thus, increasing the potential revenue.

The past few years have also witnessed more partnerships as large businesses attempt to reduce competition in the market.

COVID-19 has driven the industry a few years into the future, as many of us ordered food online for the first time during the lockdown.

Uber Eats case study proves that Uber Eats reported a massive increase in orders between February and March when the entire world was in lockdown.

This case study will examine Uber eats analysis and the Uber Eats Marketing strategy that helped them gain popularity and increase revenue.

What is SWOT Analysis?

SWOT analysis is a strategic planning and management method to help organizations identify strengths, weaknesses, opportunities, and threats.

It evaluates an organization’s competitive position, external and internal factors, and existing and future potential.  

Uber Eats Case Study

Uber Eats is an online food ordering service by Uber Technologies. It operates in over 6,000 cities across 45 nations and is expanding its business fast.

Customers use a separate smartphone app, Uber Eats, to order food online. It allows customers to order food from a selected range of restaurants. The collected food is delivered to customers by Uber drivers.

With Uber’s Fast Delivery, customers can get their favorite food from their favorite restaurants within 10 minutes at their doorstep. Being a late participant in the online food delivery business, UberEats has its advantages.

It got the opportunity to learn from other prominent players in the market and redefine the competitive landscape.

This Uber Eats case study analyzes the major competitors, recent trends in customer behaviors, and Uber Eats marketing tactics execution.

The Uber Eats case study proves that one of the significant reasons behind Uber Eats success is its strong brand image and its unique values.

According to the Uber Eats case study, it has lower delivery rates and faster delivery than Grubhub, Postmates, and other online food delivery services.

However, ordering food from Uber Eats gave many a limited experience. Uber Eats case study shows that there were restricted food choices and restaurants. Moreover, no option for food customization makes customers feel unsatisfied with Uber Eats.  

The company focuses on customer reviews and keeps upgrading its service. For example, in 2016, Uber Eats launched two ways to order food.

First, customers could order from restaurants through the app or pre-fixed lunch options. Then, Uber would deliver the same in 10 minutes.

These new features made Uber Eats more convenient and satisfied many customers with different needs and preferences.

Uber Eats Case Study- Acquisition by Zomato

On 21 st January 2020, the only big news was that Zomato acquired Uber Eats. The deal has been in progress since 2019 and was finally concluded for $350 million. This deal was an all-stock transaction.

Zomato did not pay the monetary prize for this deal but offered an equal share in the company. Customers trying to order food from Uber Eats came across Zomato’s page.

A Uber Eats case study proves that the exit of Uber Eats from the food delivery industry has made the food delivery market a duopoly between Swiggy and Zomato.  

Uber Eats is the third most popular name in online food delivery. Swiggy was and is still a tremendous competitor. While Swiggy gets nearly 1.4 million orders daily, Zomato receives around 1.2 million orders, whereas Uber Eats gets only 4 lakh daily.

When this challenging competition was going on, the two startups, Zomato and Swiggy, saw a new competitor in the market. The e-commerce giant, Amazon, entered the food delivery market with new strategies and offerings.

SWOT Analysis of Uber Eats

• Speedy delivery. Customers get their favorite food within 10 minutes at their doorstep.
• Flexibility in food delivery.
• A separate team of drivers handling Uber Eats deliveries avoids overlap with regular Uber cab drivers.
• No hidden charges ensure transparency and consistency in price.
• Restricted selection of restaurants.
• To know the reviews of restaurants, customers need to log in to Yelp.
• The items under the “Uber Instant Delivery” menu are prepared beforehand and kept in the driver’s vehicle. It is the reason why customers throw food many times.

Opportunity

• Uber Eats is available in over 6,000 cities across 45 countries and is expanding.
• Being a late entry in the online food delivery industry, Uber eats got the chance to learn from other major players’ mistakes.
• Give customers the option to place orders in advance. It will help them in assessing the demand for food from each restaurant.
• Offer customers the flexibility to get their food delivered at their available time.
• Uber Eats is a new name in the online food delivery industry.
• Other major food delivery apps like Postmates partner with Chiptole, Starbucks, and other famous companies.

Top 5 Competitors of Uber Eats

Revenue of Uber Eats

Uber Eats is a name that has become synonymous with distraction, challenging norms, and changing rules in an industry that has been around for decades.

Though Uber Eats has had its share of challenges since its launch, its forward-thinking, flexible approach helped it become an industry leader.

This Uber Eats case study narrates the story of Uber Eats, including how it started, became the third most popular food delivery app, and became a common name in everyday life.

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Shareholders

Info Edge India owns the largest share in Zomato. This company is a media and internet firm and owns a 23.9% stake in the company. 

Some of the major shareholders in Zomato include:

Did you know?

Deepinder Goyal, the co-founder and CEO of Zomato, owns a 4.3% stake in the company. 

Business Model

Zomato provides a treasure trove of information, including restaurant names, addresses, contact details, and user-generated reviews and ratings. This helps the audience discover new and unique restaurants.

Zomato utilises the power of the restaurant depository and delivers food orders from these restaurants. Since almost every major restaurant is listed on Zomato, the users’ ability to switch to different apps is drastically reduced. They deliver food quickly to the address of the customer and charge a small fee in exchange for this service.

Zomato is earning money from a total of 5 segments, they are:

• Food Delivery
• Hyperpure (B2B Supplies)
• Quick Commerce (Blinkit)
• Going-out (Events platform)

Major Competitors

Swiggy is a powerful rival of Zomato, forcing the company to innovate regularly due to the extremely low customer switching cost. As one of Zomato’s primary rivals, Swiggy has cemented its position in the Indian market, posing a strong threat to Zomato’s market share. 

Uber Eats is a company that falls under Uber Technologies and serves 60 countries; it is one of the leading food delivery platforms in the world. Zomato has acquired Uber Eats’ India operations, but Uber Eats still stands as a formidable competitor to Zomato in foreign markets.

DoorDash mainly serves in the United States and Canada. The company has built a reputation for its extensive restaurant partnerships and robust delivery network. 

EatClub operates in 5 metro cities and has eight brands, such as Box8 and Mojo Pizza. They come across as a very strong contender for Zomato. 

Here is some important market data of Zomato.

Financial Highlights

Income statement.

Profitability Ratios

Shareholding Pattern

SWOT Analysis

• Globally available: Zomato expanded its services to various countries and made a global footprint, encouraging international reach and providing access to diverse markets. 
• Leading food delivering services : Zomato has become a leader in the food delivery industry. Its food ordering and delivery services cover more than 1,000 cities and have 14.7 million monthly average transacting customers.
• High Competition – Zomato operates in a highly competitive market, with various food delivery giants like Swiggy, Uber Eats, and EatClub competing for the same customer base.
• Operational challenges – The company faces several operational challenges as a food delivery company, such as delivery delays, food quality issues, and logistical problems. These issues can result in negative customer feedback and reduced customer loyalty, ultimately hurting the company’s profitability.

Opportunities

• Expansion through sustainable practices : The company is capitalizing on the growing demand for sustainable practices by expanding its eco-friendly initiatives.
• Revenue streams: The company diversifies revenue streams and enhances user engagement. Zomato must expand faster than others to stay ahead of the curve.
• New Users: Nowadays, smartphones and internet users have increased tremendously. This will help Zomato gain new users and audiences. 
• Fragile Business model: Economic factors can affect consumer dining and food delivery spending, potentially impacting revenue.
• Loss turning segments: The company loses a significant chunk of money in the Quick Commerce segment and thus has to return lower profits at a consolidated level. 

Zomato is building brand recognition, global reach, and user-generated content to contribute to its success in the food delivery industry. Zomato faces lots of challenges, constantly innovating and improving its services to stay ahead of the competition. They must maintain their position and take more initiatives to grow and expand their business. 

Frequently Asked Questions (FAQs)

• Who is the CEO of Zomato?

Ans. Deepinder Goyal heads the company as the CEO.

• Is Zomato profitable?

Ans. Zomato turned profitable for the first time in the quarter ending June 23. The company produced a profit of INR 2 Crores

• What is the former name of Zomato?

Ans. Zomato was founded as FoodieBay in 2008 by Deepinder Goyal and Pankaj Chaddah.

• How many segments does Zomato report?

Ans. Zomato has 5 segments, namely – Food Delivery, Hyperpure, Quick Commerce, Going-out, and Others

• Is Zomato used outside India?

Ans. The company is operational in Indonesia, Sri Lanka, and UAE.

Disclaimer: The securities, funds, and strategies mentioned in this blog are purely for informational purposes and are not recommendations.

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Zomato Acquires Uber Eats in India: an Analytical Study

Journal of Information and Computational Science ISSN: 1548-7741

ZOMATO ACQUIRES UBER EATS IN INDIA: AN ANALYTICAL STUDY

Dr. Nandani Sharma

Associate Professor, Management and Technical Campus,

In India there are lot many companies done M&A last from many decades. This paper presents a study on why Zomato acquire Uber eats in India. This paper also includes that what kind of benefits Zomato and Uber eats have after doing this acquisition and what all steps they have to consider before going for Acquisition process. This paper also contains a causal loop structure which gives us clear idea about the benefits of Acquisition process. This loop structure means the factors and parameters that relate to Acquisition. From the literature review it is found out that there is no one study is done on this topic. From the data obtained it is found out that Zomato Acquire Uber Eats to increase its value and to increase its profit. This paper is totally based on secondary data covers from current news and experts views. In this paper researcher also include some findings, suggestions and conclusion. Key Words: Acquisition, Zomato, UBER EATS

MEANING OF ACQUISITION

An acquisition is when a company purchases (50% or more than 50% of shares) most or all of another company's shares to gain control of that company. In today’s world acquisitions are very common in businesses. We mostly heard about acquisitions of large well-known companies in the news. In reality, mergers and acquisitions (M&A) occur more regularly between small- to medium-size firms than between large companies. ACQUISITIONS: MOSTLY AMIABLE Friendly acquisitions occur when the target firm agrees to be acquired; its board of directors, employees, assets etc. for mutual benefits of the acquiring and target companies. Both companies develop strategies to ensure that the acquiring company purchases all the appropriate assets, and also review the financial statements and other valuations for any obligations that may come with the assets. Once both the parties agrees on the term and conditions than they meet for legal stipulations as well as for the purchase proceeds.

Volume 13 Issue 2 – 2020 www.joics.net Journal of Information and Computational Science ISSN: 1548-7741

WHY COMPANIES MAKE ACQUISITION?

Companies acquire other companies for various reasons:

 Economies of scale  Diversification  Greater market share  Increased synergy  Cost reductions, or new niche offerings.  Others reasons : As a Way to Enter into Foreign Market Every company want to expand its business into international level or across the boundaries that’s why an existing company acquire that another company. This is the easiest way to enter into foreign market. The purchased business will already have its own personnel, a brand name, and other intangible assets, which could help to ensure that the acquiring company will start off in a new market with a solid base. As a Growth Strategy Most well established companies might look for acquisition of young companies so that they can generate more revenue. Through this they also entered into new market to gain profit. To Reduce Excess Capacity and Decrease Competition In real world there are lot many competition is available in the market that why companies may look for acquisitions to reduce excess capacity, eliminate the competition, and focus on the most productive providers. To Gain New Technology Sometimes it can be more cost-efficient for a company to purchase another company that already has implemented a new technology successfully than to spend the time and money to develop the new technology itself.

LIST OF FEW ACQUISITION MAKE BY COMPANIES IN INDIA

S.No. List of Acquisitions 1 Zomato acquires Uber Eats in India in a Stock Deal and Uber Technologies to sell Uber Eats in India to rival Zomato in return for 9.9% stake in the startup 21 January, 2020 2 PE firm True North acquires gynaecology brands from Glenmark Unit 22 January, 2020 3 Siemens AG to acquire New Delhi based C&S Electric for euro 267 million 24 January, 2020 4 Patanjali Ayurved acquires Ruchi Soya through an insolvency process 18 December, 2019 5 McDonald’s India enter tieup with Zomato for food delivery in North and East region,16 January, 2020 6 Advent International to acquire controlling stake in Crax maker DFM Foods 10 September, 2019 7 Haldiram Bhujiawala to acquire Coffee Bean franchise from Everstone Capital 23 August, 2019 8 Groupe Lactalis to acquire diary business of Prabhat Dairy for Rs 1,700 cr 22 January, 2019 9 Lotte Confectionery to acquire Havmor Ice Cream for Rs1,020 cr 23 November 2017 SOURCE:Mergersindiainfo.com

ABOUT UBER EATS

Uber entered into the food delivery business in year 2017. Swiggy and Zomato already capture the huge food-tech market. They had already roped major restaurants as exclusive partners. Uber gives heavily discounts and offers to acquire and retain customers

Uber Eats entered into the Indian market and scaled business into 41 cities with over 65,000 riders who deliver food from 26,000 restaurant partners. India’s has hyper-competitive delivery market and due to steep discounts and low value orders, Uber eats has been drag losses on the company’s financials.

Uber also deals with rides in India.

ABOUT ZOMATO

Zomato is an Indian restaurant aggregator and food delivery start up founded by Mr. Deepinder Goyal in 2008. Zomato provides information, menus and user-reviews of restaurants, and also has food delivery options from partner restaurants in selected cities. As of 2019, the service is available in 24 countries and in more than 10,000 cities. Zomato was founded as Foodiebay in 2008. It was renamed Zomato in 2010. 111

REASON WHY UPER EATS SHUT DOWN

Uber eats has underperformed in the market. Uber eats has been shuttering or downsizing its loss-making units (cash burn of $20 million per month in India) and geographies. This business was among the low-priority ones for the company. Last year, Uber said in its quarterly results announcement that the Indian food delivery business has been a drag for it. According to regulatory disclosures made in India, Uber had projected an operating loss of Rs 2,197 crore in its food delivery business for the five months through December 2019. This loss was larger than what was expected to be incurred by its core ride-hailing business, which was Rs 1,645 crore (according to a valuation report prepared by KPMG affiliate BSR and released in November). In February last year 2019, Uber had come close to selling the business to Swiggy but the deal fell through. In fact, since early last year, the company had started its cutbacks. It had halved its annual cash allocation to the food-delivery business in India to $90-120 million, which took a direct impact on the order numbers. At the same time, Uber’s India rival Ola too had pulled its focus away from its food-delivery business, Food panda, and started to sell private brands on marketplaces.

WHY ZOMATO ACQUIRE UBER EATS

The acquisition signals a positive shift in the market. The acquisition makes the Indian food- tech and food delivery market a two-horse race — Zomato and Swiggy. Zomato take over Uber Eats’s business in 38 cities across India. Zomato acquired Uber’s food delivery business in India on 21 January 2020 in an all stock transaction, which gives the ride hailing major a 9.99% ownership in the Gurugram- headquartered company. Uber Eats will, continue to operate in Sri Lanka and Bangladesh. “This year we are going to be tested on how well we execute and retain our market leadership in terms of customer service, operating efficiency and in terms of size of our business, in that order,” Deepinder Goyal, founder and CEO,Zomato. “Over the last one year, Uber Eats has been a very marginal player in the whole game, with Swiggy and Zomato dominating 90% of the market,” said Anurag Katriar, president, NRAI. Zomato is, incentivising Uber Eats customers with a 50% discount on their next three orders in a bid to convert those customers into transacting users, which will lead to a spike in 112

volumes. After this acquisition, India is expected that Zomato corner more than 50-55% market in terms of the number and value of orders. It is one less competition for the company to deal with. “In parts of Tamil Nadu, Kerala, and Madhya Pradesh, Uber Eats has a stronger foothold compared to Zomato with an about 30% market share. The acquisition, therefore, will give increased access to Zomato in certain micro-markets.

Zomato acquires Uber Eats business in India to consolidate position  Zomato’s deal gives Uber a 9.99% ownership in Zomato.

 Uber Eats in India will discontinue operations and direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform

"This acquisition significantly strengthens our position in the category. With Uber Eats, Zomato will now collectively have a 55% share of the food delivery market and compete largely with home-grown Swiggy. Zomato delivers to over 550 cities in India. Delivery partners, who were earlier associated with Uber Eats India, will on-board Zomato’s fleet. Close to 245 Uber Eats employees will be affected by this deal. These employees will not be absorbed by Zomato as part of the transaction. Uber Eats as a brand will not exist in India going forward I food-tech market, but the brand will continue operations in neighboring countries of Bangladesh, and Sri Lanka. Uber Eats, as an app, was first piloted in 2014 in Los Angeles. THE BIG WINS FOR ZOMATO Currently the battle in the foodtech business is about who has more delivery partners, as that ensures greater reach. The consumer today wants food delivered in the quickest possible time, and that means there need to be more people on the street, not just one delivery person doing more than one delivery,” explains an early-stage investor. “The biggest benefit will be gaining the delivery partners. Currently, Zomato has partnered with 1.5 million restaurants across 24 countries and serves more than 70 million users every month. This will be a little more than Swiggy's 1.5 lakh delivery partners.

UBER CONTINUE WITH LOCAL RIDES AND UBER EATS AFTER THIS DEAL Uber will continue to focus on building its ride-hailing business in India where it competes with rival Ola.

“India remains an exceptionally important market to Uber, and we will continue to invest in growing our local Rides business, which is already the clear category leader.

IMPORTANT STEPS TAKEN BY UBER EATS AFTER ACQUISTION

In India, Uber Eats has close to 80-100 employees full time on its India payroll. The company has offered these executives salary till March 3, along with one month of severance for each year spent in the firm. In addition, also paying a one month notice period, and shares vested till March 3. On top of this, since the firm acknowledges a performance review cycle was due in two months, they will also offer employees 2 months of salary as closure bonus plus leave encashment. RESEARCH METHODOLOGY:

 To study the fact figures of this acquisition

NEED & SIGNIFICANCE:

This research is needed to identify why Zomato acquire Uber eats in India. This research is beneficial for the academicians, Ph.D scholars, Students etc. Other studies can also be done that will be untouched in this study. SCOPE: This research study is helpful to understand the facts behind this acquisition. DATA COLLECTION: This research study is basically based on secondary data that was collected from newspapers, magazines etc. LIMITATIONS: This research has been limited to the above topic that is Zomato acquire Uber eats in India. FINDINGS Zomato acquires Uber Eats for Rs 2,485 crore; over 100 employees face uncertainty, while Swiggy is little ahead of Zomato in the food delivery space, Uber Eats coming onboard with Zomato will surely give it more firepower to stake on Swiggy as the new entity will automatically capture 50-55% market in food delivery business. Zomato acquired Uber Eats in a $350 Mn deal, which saw Uber get a 9.99% stake in Zomato. According to the Ministry of Corporate Affairs Filings, Uber Eats was expected to post a loss of INR 762.5 Cr ($107.6 Mn) between August 2019 and December 2019. For the same five- 114

month period, Uber also projected higher operating losses valuing at INR 2,197 Cr ($309.6 Mn) for its food delivery business. Uber’s India food delivery business saw a decline which is said to have negatively impacted the global numbers. Uber CFO, Nelson Chai, in a meeting with analysts, said that Uber Eats’ India business dragged down the food delivery arm’s average net revenue. “Without India, the adjusted net revenue (ANR) would have been 11.1%. Now, it is 10.7%,” Smaller restaurant owners, who were exclusively on Uber Eats, complained about the app being abruptly shut down with no prior communication.

Foodtech is the fast-growing ecosystem at all over the world. Zomato acquiring Uber Eats would definitely be a win-win situation for both the companies and would make the industry a duopoly with Swiggy and Zomato becoming the major players in the online food delivery industry in India. “With multiple giants like Amazon, Ola and Flipkart experimenting in the food space, India is definitely a large market offers scope for all the players to flourish. From the consumers’ point of view, this acquisition would lessen their decision fatigue with a consolidated offering,” “Most Corporate name changes are the results of M&A. But these tend to be Unimaginative” (James Surowieeki)

1. https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/zomato-uber- eats-deal-to-up-appetite-of-global

2. https://yourstory.com/2020/01/zomato-uber-eats-acquisition-foodtech- deepinder-goyal-swiggy

Volume 13 Issue 2 – 2020 www.joics.net

• Case Reports

Comparison Of Two Most Popular Food Delivery Apps in India: A Case Study of Swiggy And Zomato

• February 2023

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News release details

Zomato acquires uber’s food delivery business in india.

GURGAON, India--( BUSINESS WIRE )--Zomato, one of the largest food apps in India, announced today that it has acquired Uber’s food delivery business in India in an all-stock transaction, which gives Uber 9.99% ownership in Zomato.

Deepinder Goyal, CEO of Zomato, commented: “We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across more than 500 cities in India. This acquisition significantly strengthens our position in the category.”

Dara Khosrowshahi, CEO of Uber, said: “Our Uber Eats team in India has achieved an incredible amount over the last two years, and I couldn’t be prouder of their ingenuity and dedication. India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business, which is already the clear category leader. We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success.”

Uber Eats in India will discontinue operations and direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform, effective today.

About Zomato:

Zomato is a restaurant review, restaurant discovery, food delivery and dining out transactions platform providing in-depth information for over 1.5 million restaurants across 24 countries and serves more than 70 million users every month.

About Uber:

Uber’s mission is to create opportunity through movement. We started in 2010 to solve a simple problem: how do you get access to a ride at the touch of a button? More than 15 billion trips later, we’re building products to get people closer to where they want to be. By changing how people, food, and things move through cities, Uber is a platform that opens up the world to new possibilities.

[email protected]

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Email Alert Sign Up Confirmation Global citizenship US political engagement U.S. Political Activities 2021 U.S. Political Activities 2022 U.S. Political Activities H1 2023 Uber vs. driving jobs Uber for Business Uber Freight Uber Health Advanced Technologies Group Accessibility Facebook (Opens in new window) Twitter (Opens in new window) Youtube (Opens in new window) Linkedin (Opens in new window) Instagram (Opens in new window) 297 IMAGES Acqusition of Zomato and Uber Eats UberEats and Zomato Case Study UberEats and Zomato Case Study Acquisition BY Zomato OF UBER EATS Analysis of Zomato's Acquisition of Uber Eats Extending the scope of Uber Eats- a UX Case Study VIDEO Dabbawala In Hyderabad.. Srimathi Food To Office!, Home Food A case study of Zomato's digital marketing strategies and how they were used Dinner time #order special #swiggy Zomato 😆😆😆 Tesla The Solarcity Acquisition Case Study Solution & Analysis ghar ki kichen se kaise kamaye, zomato swiggy business model, business idea for women, deepak shukla How did Zomato manage to turn profitable in Q1? Zomato result analysis COMMENTS Zomato Zomato acquired Uber Eats in an all-stock deal valued at $350 million on January 21, 2020. This gave Uber Eats a 9.99% stake in Zomato. Both companies started in 2008, with Zomato founded in India and expanding globally, and Uber Eats launching as an offshoot of Uber in 2014 to offer food delivery services. The acquisition helped Zomato gain market share over competitors like Swiggy in India ... Acquisition by Zomato of Uber Eats: Analysis Zomato agreed to give 10 per cent of shares to Uber Eats and acquired 100 per cent of stocks. In this type of acquisition, the acquirer assumes all liabilities and assets of the business and the buyer can also contractually allocate the liabilities. The cost of acquisition in case of stock acquisition or stock deal is inexpensive and easy to ... PDF Zomato Acquires Uber Eats in India: an Analytical Study are lot many companies done M&A last from many decades. This paper presents a study on why Zomato acquire Uber eats in India. This paper also includes that what kind of benefits Zomato and Uber eats have after doing this acquisition and what all steps they have to consider before going for Acquisition process. This paper also contains a causal loop structure which gives us clear idea about the ... Brief History of Zomato and Uber Eats The document analyzes the mergers and acquisitions of Zomato and Uber Eats. It provides background on both companies and discusses Zomato's acquisition of Uber Eats in India in January 2020. Zomato acquired Uber Eats through an all-stock deal to gain a larger market share than competitor Swiggy, increase negotiating power with restaurants, and become the dominant food delivery platform in ... Zomato-UberEats Acquisition The Zomato-Uber Eats deal which took place in February, 2020 raised several pertinent questions of law in the Indian Antitrust regime. Food delivery giant Zomato's acquisition of Uber Eats should ideally be scrutinized under the Section 5 (a) of the Competition Act, 2002 ("the Act") but it escapes combination assessment by availing of the target exemption or de minimis threshold ... UberEats and Zomato Case Study UberEats and Zomato Case Study On 21st January 2020, the only news that was visible was Zomato bought Uber India. The was in progress since June 2019 and it finally reached its destination for $350M i.e. RS. 2,485cr. the deal was an all-stock- transaction. This means that Zomato did not pay the monetary prize for the deal but gave an equal share in the company. UberEatsnow holds 9.99% of the ... PDF COMPETITION COMMISSION OF INDIA Case No. 16 of 2021 6. In relation to the market share of the OPs, NRAI has submitted that Zomato has managed to increase its market share pursuant to its acquisition of Uber Eats. While referring to the RedSeer Report quoted in an article, NRAI has claimed that Zomato's market share is close to 52% in terms of gross order volume and Swiggy commands a market share of 43% in the market (pan-India basis). Further ... (PDF) Will Zomato be able to acquire the market leader position in the NEW DELHI: Uber has reached an agreement to sell its India food delivery business to Zomato in an all -stock deal by diluting a 9.99% stake to the San Francisco-based ride-hailing giant, the two ... PDF A Review on Zomato Acquires Uber Eats AIMS Institute of Management Studies. Abstract- This paper is about almost information related to branded applications of online food ordering and delivery at door step and it also includes the circumstances under which Zomato Buys Uber Eats. Acqusition of Zomato and Uber Eats Zomato has acquired Uber Eats' Indian operations for around $350 million, giving Uber a 9.99% stake in Zomato. This allows Zomato to gain market power by reducing competition between the two food delivery services. Both companies conducted a SWOT analysis and determined the acquisition provides financial gains and competitive advantages while potentially slowing growth and reducing discounts ... (PDF) A case study on Zomato A case study on Zomato - The online Foodking of India April 2020 Journal of Management Research and Analysis 7 (1):25-33 7 (1):25-33 DOI: 10.18231/j.jmra.2020.007 Authors: Ashok Panigrahi Narsee ... Acquisition Of Uber Eats By Zomato With the all-equity deal of Uber Eats with Zomato (where Uber obtained a 9.9% stake in Zomato for the entire Uber Eats business), Zomato and Swiggy are the two largest players still standing in the Food Delivery business. Analysing Mergers And Acquisitions In Light Of The Acquisition ... The Author, through this research work tries to analyse the provisions of the Indian Companies Act, 2013 relating to M&A and their impact on the mergers and acquisitions. She further focuses on the famous acquisition in India of the year 2020, the merger of Uber eats with Zomato pursuant to the Companies Act 2013, for an all stock acquisition deal, to help Zomato gain competitive benefits from ... Zomato Case Study: History, Valuation, Product, Services & Growth Challenges Faced by Zomato: One of the biggest challenges faced by Zomato is the intense competition in the food delivery industry. Zomato competes with other major players such as Uber Eats, Swiggy, and DoorDash. Zomato also faced challenges in expanding into new markets. In some countries, such as China and the United States, the company struggled to gain a foothold due to strong local ... A Comprehensive Uber Eats Case Study- 2023 Uber Eats Case Study- Acquisition by Zomato. On 21 st January 2020, the only big news was that Zomato acquired Uber Eats. The deal has been in progress since 2019 and was finally concluded for $350 million. This deal was an all-stock transaction. Zomato Case Study: Business Model, Acquisitions, KPIs ... Learn about Zomato's business models, key performance indicators, and SWOT analysis through this comprehensive case study. Merger of Zomato and Uber eats by Gayathri Anil on Prezi The merger between Zomato and UberEats Case Analysis After acquisition By: Div. C - BBA LLB Sumedha M (19010126253) Prateek S (19010126265) Gayathri A (19010126269) Adithya N (19010126294) The effect of the Acquisition on the larger online food industry Marketing Strategies Zomato's Triumph till IPO: Is It Success Through Relationship? This case study presents the key strategies followed by Zomato to achieve success till Initial Public Offer (IPO). It highlights how a loss-making company and food aggregator such as Zomato has succeeded through relationship and communication strategies maintained by the company and its co-founder Deepinder Goyal. Zomato Acquires Uber Eats in India: an Analytical Study Zomato acquires Uber Eats business in India to consolidate position Zomato's deal gives Uber a 9.99% ownership in Zomato. Uber Eats in India will discontinue operations and direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform. "This acquisition significantly strengthens our position in the category. (PDF) Comparison Of Two Most Popular Food Delivery Apps in India: A PDF | On Feb 1, 2023, Rusha Mudgal and others published Comparison Of Two Most Popular Food Delivery Apps in India: A Case Study of Swiggy And Zomato | Find, read and cite all the research you ... Zomato Acquires Uber's Food Delivery Business in India Zomato, one of the largest food apps in India, announced today that it has acquired Uber's food delivery business in India in an all-stock transaction, which gives Uber 9.99% ownership in Zomato. Deepinder Goyal, CEO of Zomato, commented: "We are proud to have pioneered restaurant discovery and to have created a leading food delivery ... Blockchain implementation for food safety in supply chain: A review The integration of blockchain technology into food supply chains represents a pivotal step in addressing the current issue of food safety. 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