Active M&A Since COVID-19... US Companies Accelerate Discovery of New Growth Opportunities

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Silicon Valley companies in the United States are turning the crisis caused by the novel coronavirus disease (COVID-19) into an opportunity by aggressively pursuing mergers and acquisitions (M&A). Since the COVID-19 pandemic, contactless businesses such as video conferencing and food delivery services have gained attention, accelerating efforts to discover new growth engines through M&A.

According to local U.S. media such as Bloomberg and The Wall Street Journal (WSJ), Uber is reportedly in negotiations to acquire Grubhub, the second-largest food delivery company in the U.S. Bloomberg cited sources saying, "Uber made the first acquisition offer to Grubhub earlier this year," and "if discussions go well, an agreement could be reached within this month."

Uber owns a subsidiary called Uber Eats, which is similar to Grubhub and ranks third in market share in the U.S. Although Uber's ride-sharing service performance plummeted after COVID-19, Uber Eats' first-quarter bookings surged by 50% compared to the same period last year. Accordingly, Uber has expressed its intention to make food delivery its core business by acquiring Grubhub. Industry sources predict that if Grubhub and Uber Eats merge, they will account for 55% of the U.S. food delivery service market.

[Image source=Reuters Yonhap News]

Apple is also leveraging the COVID-19 crisis as a stepping stone to discover new growth opportunities. On the 14th (local time), Apple acquired the virtual reality (VR) startup 'NextVR.' Based in California, NextVR broadcasts events such as sports games and concerts in virtual reality. CNBC analyzed, "This acquisition is evidence of Apple's plan to enter the VR and augmented reality technology market as a new product category."

Although specific deal terms have not been disclosed, CNBC cited local IT media Nine to Five Mac, reporting that the transaction was valued at approximately $100 million (about 123.1 billion KRW).

On the same day, Microsoft (MS) reportedly agreed to acquire the telecommunications software company 'Metaswitch Networks.'

This company provides software that enables mobile carriers to deliver voice and data to customers. Using this software, client companies can enjoy faster speeds without increasing data capacity.

U.S. media expect MS's move to contribute to the expansion of its cloud service 'Azure.' MS is chasing Amazon Web Services, the industry leader in the cloud market.

Meanwhile, among Silicon Valley companies, Alphabet, Google's parent company, was identified as the most active in M&A. Apple, Intel, Facebook, and HP followed.

This content was produced with the assistance of AI translation services.