Uber Technologies Inc. (NASDAQ: UBER) is reportedly exploring a potential acquisition of Expedia Group Inc. (NASDQ: EXPE), a move that could significantly reshape the travel and transportation industry. The Financial Times reported on October 17, 2024, that Uber has approached advisers to examine the feasibility of a deal, although no formal approach has been made to Expedia and there are currently no active discussions.

The potential acquisition would mark Uber’s largest to date, with Uber’s market capitalization standing at $173 billion compared to Expedia’s $20 billion.

Uber CEO Dara Khosrowshahi, who led Expedia from 2005 to 2017 and remains a non-executive board director, would likely recuse himself from deal talks. The move aligns with Khosrowshahi’s vision of Uber as the “Amazon of transportation,” potentially expanding the ride-hailing giant’s reach into the travel booking sector.

Uber, which became profitable for the first time in 2023, has been diversifying its services beyond ride-hailing to include train and flight bookings, food delivery, and logistics.

The company has also made notable acquisitions in recent years, including Postmates for $2.65 billion and Drizly for $1.1 billion. An Expedia acquisition could provide synergies between ride-hailing and travel booking services, allowing Uber to offer more comprehensive travel solutions to customers.

Following the news, both companies experienced significant stock movements in pre-market trading. As of 9:25 AM EDT (at the time of writing), Uber’s stock was down 2.63% to $79.75, while Expedia’s stock surged 6.60% to $160.80.

Uber’s stock has shown strong performance over the past year, with a 1-year return of 88.36%, outperforming the S&P 500’s 35.00% gain. The company’s market capitalization stands at $172.07 billion, with a trailing twelve-month revenue of $40.06 billion and a net income of $2.01 billion. Analysts’ recommendations for Uber stock lean towards “Buy.”

Expedia, one of the world’s largest travel booking companies, reported its highest-ever annual revenue in 2023. However, the company faced challenges in early 2024, noting a slower-than-anticipated recovery at its Vrbo brand and a softening in travel demand.

Despite these headwinds, Expedia’s stock has shown a 1-year return of 52.12%, also outperforming the S&P 500. The company’s market capitalization is $19.68 billion, with trailing twelve-month revenue of $13.26 billion and net income of $808 million. Like Uber, analyst recommendations for Expedia stock lean towards “Buy.”