Bottom line: Uber on Monday announced it has reached an agreement to acquire food delivery service Postmates for $2.65 billion in an all-stock deal. The two sides expect the transaction to close by the first quarter of 2021 pending regulatory approval and other customary closing conditions. Uber said it will continue to operate the Postmates app as a standalone entity.

Uber, if you recall, was expected to merge with Grubhub in a bid to keep revenue coming in during the Covid-19 pandemic. Talks broke down as the two sides grappled over pricing details, leaving the door open for rival Just Eat Takeaway to swoop in and snag Grubhub for $7.3 billion last month.

Like many consumer-facing companies, Uber was hit hard by the global pandemic. During its first quarter earnings call, Uber CEO Dara Khosrowshahi said gross bookings in their core rides business segment dropped 80 percent in April compared to the same period a year earlier.

Fortunately for Uber, the company had a significant war chest in place to deal with challenging times in the form of $10 billion in unrestricted cash and an alternative business plan to fall back on – food delivery. Even still, the company had to lay off thousands of employees as Covid-19 containment measures kept people at home and reduced demand for Uber’s ridesharing service.

The company said it expects to issue roughly 84 million shares of common stock to cover the cost of the purchase. As of this writing, Uber is trading at $30.68 per share.

Image credit: Postmodern Studio, Mark Kauzlarich