Uber Technologies Inc. is acquiring Postmates Inc. for about $2.65 billion in an all-stock transaction. Uber said in a news release that the newly combined third-party delivery entity combines the strengths of each platform to create a more powerful player in the highly competitive restaurant delivery market.

The deal means Uber's "Rides" and "Eats" platforms join the differentiated geographic areas and customer demographics of Postmates, along with Postmates more localized small- and medium-sized restaurant connections. Uber also views Postmates' involvement in the "delivery-as-a-service" market as an added plus since it complements Uber's efforts in delivering groceries, essentials and other goods.

The partnership, according to Uber, is ideal for restaurants because it offers more services while remaining cost-effective for businesses. Diners benefit from expanded dining options across a wider range of restaurant types. In fact, Uber said delivery workers will have a chance to earn more by increasing batched orders for more profitable use of their time.

Following the closing of the transaction, Uber intends to keep the consumer-facing Postmates app running separately, supported by what it said is a more efficient, combined merchant and delivery network.

"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," Uber CEO Dara Khosrowshahi said in the release. "As more people and more restaurants have come to use our services, Q2 bookings on Uber Eats are up more than 100 percent 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."

Uber will issue about 84 million shares of common stock for all of the fully diluted equity of Postmates, according to the press release.

"Over the past eight years we have been focused on a single mission: enable anyone to have anything delivered to them on-demand," Postmates co-founder and CEO Bastian Lehman said in the release. "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."

The boards of both companies approved the transaction, and stockholders representing a majority of Postmates' outstanding shares have committed to support the transaction. The transaction is subject to the approval of Postmates stockholders, regulatory approval and other customary closing conditions and is expected to close in Q1 2021.