Expedia Group is being reported as a potential bid target by ride-hailing firm Uber.
Uber has explored a possible bid for the nearly $20 billion US travel booking website, in what would be it largest acquisition as it looks to diversify further and find new avenues for growth, the Financial Times reported.
Uber boss Dara Khosrowshahi served as Expedia’s chief executive from 2005 to 2017 and remains a non-executive director on the board.
Advisers were approached by Uber in recent months after the idea of an Expedia acquisition was broached by a third party to examine whether such a deal would be possible and how it could be structured, according to three people the FT described as being familiar with the process.
However, those briefed on the matter cautioned that Uber’s interest was at a very early stage and it was possible that a deal would not transpire.
No formal approach has been made to Expedia and there are no current discussions, one person told the newspaper.
Uber has expanded in recent years from its ride-hailing roots into train and flight bookings, food delivery, corporate logistics and advertising as it seeks to transform itself into a “super app”
Khosrowshahi told the FT this week: “Anywhere you want to go in your city and anything that you want to get, we want to empower you to do so.”
Adding Expedia and its booking technology would turbocharge those ambitions. The fourth-largest online travel company generated $12.8 billion in revenue for 2023 amid a post-pandemic tourism boom but it cautioned this summer that it faced a slowdown in travel demand.
Uber’s firepower for merges and acquisitions has been strengthened by an 85% surge in its stock over the past year, giving it a market capitalisation of $173 billion.
The San Francisco-based company reported its first year of operating profitability in February, driven by resurgent demand for ride-hailing alongside its food delivery, logistics and fast-growing advertising arm.
Chief financial officer Prashanth Mahendra-Rajah said in August that Uber’s “top priority” for deploying capital was investing in growth, including via acquisitions.
Expedia’s stock has risen more than 50% in the past year, but it is only a tenth of its potential suitor’s size, with a market valuation of just below $20 billion, the FT reported.
The takeover speculation emerged as Expedia Group – which includes Hotels.com and Vrbo – released a report suggesting that almost two-third of consumers were likely to visit a less well-known destination on their next trip, while 42% of Gen Z travellers said that an all-inclusive resort would be their preferred hotel type.
Half of consumers polled have wanted to book a trip they saw on their social media feeds but cited time and complexity as the leading reasons that have prevented them from doing so, prompting Expedia to create options for users to book trips promoted by influencers.
The study also highlighted the “ease and simplicity” of opting for package travel options as “a great way to take the stress out of travel planning”.
Expedia Group is due to issue its third quarter results for the period to September 30 on November 7.