Uber Technologies, Inc. has reached a definitive agreement to acquire Postmates for approximately $2.65 billion in an all-stock transaction. The transaction is expected to close in the first quarter of 2021.

The companies’ combination will bring together Uber’s global Uber Eats and Uber Rides platforms with Postmates’ delivery business in the United States. The transaction will allow Uber access to Postmates’ differentiated geographic focus areas, customer demographics and the small- and medium-sized restaurants with which Postmates has built strong relationships with, Uber says. The transaction also will complement Uber’s efforts in the delivery of groceries and other goods.

“Uber and Postmates have long shared a belief that platforms like ours can power much more than just food delivery — they can be a hugely important part of local commerce and communities, all the more important during crises like COVID-19,” says Dara Khosrowshahi, chief executive officer of Uber. “As more people and more restaurants have come to use our services, Q2 bookings on Uber Eats are up more than 100% year on year. We’re thrilled to welcome Postmates to the Uber family as we innovate together to deliver better experiences for consumers, delivery people, and merchants across the country.”

Additionally, the pairing of Postmates and Uber Eats will offer restaurants and merchants more tools and technology to connect with a larger consumer base. Consumers will gain an expanded choice across a wider range of restaurants and other merchants, while delivery workers will have more opportunities to earn income with increased batching of orders to make better use of time, Uber says. Following the closing of the transaction, Uber plans to keep the consumer-facing Postmates app running separately supported by a “more efficient, combined merchant and delivery network,” the company says.

“Over the past eight years we have been focused on a single mission: enable anyone to have anything delivered to them on-demand,” says Bastian Lehmann, chief executive officer and co-founder of Postmates. “Joining forces with Uber will continue that mission as we continue to build Postmates while creating an even stronger platform that brings this mission to life for our customers. Uber and Postmates have been strong allies working together to advocate and create the best practices across our industry, especially for our couriers. Together we can ensure that as our industry continues to grow, it will do so for the benefit of everyone in the communities we serve.”

Uber estimates that it will issue about 84 million shares of common stock for 100% of the fully diluted equity of Postmates. The transaction is subject to the approval of Postmates stockholders, regulatory approval and other customary closing conditions.