Sanwa Alterna Brokerage comments on Uber acquiring alcohol delivery app Drizly for $1.1 billion

MONTREAL,Feb. 3,2021 -- Finance executives at Sanwa Alterna Brokeragehave today commented on Uber Technologies Inc acquiring on-demand alcohol app Drizly for around $1.1 billion in stock and cash deal,signalling the firms' intention to accelerate doorstep delivery services which have boomed during the pandemic.

"Uber's acquisition of Drizly will enable to company to deliver beer,wine and spirits throughout the U.S. in addition to their recently launched groceries,package and prescription delivery service," commented Michael Sharpe,Head of International Equities at Sanwa Alterna Brokerage.

Delivery has become an essential lifeline for Uber as the Covid-19 induced lockdown measures battered its core ride-hailing service. The firm purchased food-delivery rival Postmates Inc. last year in a stock deal worth $2.65 billion.

Uber Eats is now the second-largest food-delivery company in the U.S. after DoorDash Inc. In the second quarter of 2020,the company's food delivery revenue surpassed its ride-hailing revenue for the first time.

According to Sanwa Alterna Brokeragedata,it is estimated that online alcohol sales in the U.S. grew 80% in value last year from the previous year and that the country is now expected to overtake China as the world's largest online alcohol market this year.

In the U.S.,home delivery of alcohol has been legal in many states for years,but retailers have preferred to not offer it,mainly due to concerns about the legal age of those making the orders.

Drizly,which is compliant with local regulations in 1,400 U.S. cities,will become a wholly-owned Uber subsidiary. It will be integrated with the Eats platform,while also operating its existing app.

"The Drizly acquisition is subject to regulatory approval and is expected to close in the first half of this year. Uber anticipates that over 90% of the consideration being paid to Drizly shareholders will comprise of shares in Uber common stock,with the remaining balance paid in cash," commented Jonathan Ellis,Head of Private Wealth at Sanwa Alterna Brokerage.

On Tuesday,Uber shares were up 6.5% at $56.20

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Sanwa Alterna Brokerage was founded in 2011 to provide a streamlined wealth management and investment service for high-net-worth and ultra-high-net-worth private investors and corporate clients. We have partnered with people and businesses for two decades,incorporating a forward-looking approach that has guided our success.