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Uber explored possible bid for Expedia in ‘super app’ growth push

Buying the travel website would be the ride-hailing group’s biggest deal as it looks to diversify

Uber has explored a possible bid for Expedia, the nearly $20bn US travel booking website, in what would be by far the ride-hailing company’s largest acquisition as it looks to diversify further and find new avenues for growth.

Uber approached advisers 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 familiar with the process. 

A focus of Uber’s discussions was the role of Uber chief Dara Khosrowshahi, who served as Expedia’s CEO from 2005 to 2017 and remains a non-executive director on its board. That makes it likely that any approach would be friendly and that he would recuse himself from deal discussions.

The people 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 said. 

Khosrowshahi is a protégé of Barry Diller, the serial dealmaker who serves as Expedia’s executive chair. The Uber chief worked at Diller’s internet and media group IAC for seven years and has described him as a “great mentor of mine”.

Uber, Expedia and Diller declined to comment. Following the Financial Times report, Expedia shares jumped 7.6 per cent in after-hours trading, while Uber fell nearly 2.7 per cent.

In recent years, Uber has expanded 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” akin to the multipurpose platforms built by Chinese tech groups such as WeChat.

Khosrowshahi told the Financial Times 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 $12.8bn 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 M&A firepower has been strengthened by an 85 per cent surge in its stock over the past year, giving it a market capitalisation of $173bn. In February, the San Francisco-based company reported its first year of operating profitability, 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 per cent in the past year, but it is only a tenth of its potential suitor’s size, with a market valuation of just below $20bn.

Uber has made few large deals since it went public in 2019. It expanded into food and beverage delivery via the acquisitions of Postmates for $2.65bn and Drizly for $1.1bn, entered the freight and logistics business through the $2.25bn purchase of Transplace and struck a $3.1bn deal for Careem, a Middle Eastern ride-hailing business. 

The company also owns stakes in self-driving car company Aurora and Chinese ride-hailing group DiDi, and recently struck partnerships with Google’s Waymo autonomous taxi service and GM’s Cruise.

In August, Uber secured its first investment-grade credit rating. Executives were keen to ensure that any bid for Expedia would not result in a downgrade back to junk, two people briefed on its interest said.

At Expedia, Khosrowshahi became one of America’s best-paid executives. Uber compensated him for the $160mn in options he gave up on leaving Expedia with options tied to him boosting his new employer’s valuation to $120bn and staying for five years. 

Uber’s stock fell immediately after its listing but has since surged, lifting the value of Khosrowshahi’s options to about $136mn by the end of February. The shares have since risen by another 23 per cent.

Weight-loss drugs show promise in tackling opioid and alcohol abuse

Observational study points to the potential of blockbuster drugs such as Ozempic beyond tackling obesity and diabetes

Ozempic and similar products cut opioid and alcohol abuse by up to half, according to research that adds to evidence of the hugely popular blockbuster drugs’ broad potential beyond tackling obesity and diabetes.

An analysis of more than 500,000 people with a history of opioid-use disorder showed that more than 8,000 participants who were separately prescribed so-called GLP-1 drugs, such as Ozempic, had a 40 per cent lower rate of opioid overdose than those who did not.

In the more than 5,000 participants suffering from alcohol abuse and using a GLP-1 drug, there was a 50 per cent lower rate of intoxication than for those without a prescription.

The study, published in the journal Addiction on Thursday, is the latest effort to find medicinal ways to combat addiction. It will provide further understanding of the ever-growing potential uses of GLP-1s and boost hopes of tackling the US opioid epidemic.

The findings “provide significant initial evidence that GLP-1 receptor agonists such as semaglutide are associated with reduced rates of overdose and intoxication in patients with opioid and alcohol use disorders”, said Fares Qeadan, associate professor of biostatistics at Loyala University and a lead researcher for the paper.

Matt Field, a professor of psychology at the UK’s Sheffield university who was not involved in the study, said the study addressed “very extreme instances of substance intoxication” rather than whether users stopped taking the substance altogether — an outcome often tested by researchers studying treatments for addiction.

Field added that while Ozempic “may prevent people from taking so much alcohol or heroin that they overdose and end up in hospital, it may not actually help them to reduce their substance use, or to abstain altogether”.

The results were based on analysis of electronic health records, and randomised controlled trials would be needed to establish a causal link, he added.

The study was published as the US continues to be ravaged by an epidemic linked to overprescription of opioids in the 1990s and the subsequent abuse of heroin and synthetic drugs such as fentanyl. There were more than 81,000 deaths involving opioids in the US in 2023, a drop of 3.7 per cent on the year earlier.

Researchers have already made progress in improving the effectiveness of naloxone, a widely used overdose treatment, as well as developing non-opioid based treatments to treat addiction. Qeadan said GLP-1s could potentially become a new treatment option, particularly for those who do not fully respond to existing drugs.

The GLP-1 receptors that Ozempic activated to stimulate insulin production and slow food passing through the stomach were also present in the brain’s reward system and were linked to cravings, Qeadan added. Researchers are also exploring GLP-1 effects on nicotine addiction and alcoholism in clinical trials.

However, there are challenges to expanding the use of GLP-1s. Their effectiveness has led to high demand and sustained supply shortages of Ozempic, Wegovy and other blockbuster drugs in the class of medications. Known side-effects such as nausea and vomiting lead many users to stop using the drugs within a year.

Ozempic manufacturer Novo Nordisk is conducting a study into how a new experimental GLP-1 combining semaglutide with another compound, cagrilintide, could be used to treat alcohol use in patients with liver disease. The Danish company is also exploring whether semaglutide can tackle degenerative conditions, such as Alzheimer’s, in a sign of the wide-ranging potential drugmakers believe the drugs have.

Beyond semaglutide, participants in the latest study were using drugs including Eli Lilly’s weight loss and diabetes drug tirzepatide, the active ingredient in Mounjaro, and Novo Nordisk’s liraglutide, which is sold under the brand names Victoza and Saxenda to treat both diabetes and obesity.

Beijing is trying to restore confidence in economy amid prolonged real estate slowdown

China plans to almost double credit support for a selected group of housing projects to Rmb4tn ($562bn) as part of official efforts to reinvigorate its property sector and turn around the economy.

The so-called whitelist was introduced in January and includes projects and developers eligible to receive further financing from local and state-owned banks to help them complete unfinished projects.

Approved loans for whitelisted projects so far this year total Rmb2.2tn, according to housing minister Ni Hong, who announced the move at a press conference in Beijing on Thursday. The new funds should be deployed by the end of the year, he said, enabling developers to finish construction. “We can definitely win this battle to ensure the delivery of housing,” Ni said.

The expansion of the credit support follows a recent push from Beijing to restore confidence in the Chinese economy, where a prolonged property slowdown has combined with weak consumer demand to raise calls for more fiscal stimulus.

Authorities in September unveiled measures to support the sector, including cutting borrowing costs and easing rules for purchases of second homes. These plans, which came alongside measures to boost the stock market, buoyed hopes of a major intervention.

Xi Jinping’s government, which initially intervened to reduce leverage in the property sector in 2020, has so far held back on announcing any direct stimulus, preferring instead to encourage China’s state-owned banking sector to provide more credit.

Previous policies include a November 2022 unveiling of bank credit lines and a May plan that aimed to mobilise state-owned enterprise purchases of unsold housing. The extent of bank participation has been unclear.

In a sign that the increased support fell short of investor expectations, Chinese property developers listed in Hong Kong declined on Thursday. The Hang Seng Mainland Properties index fell 3.4 per cent, with online listings platform KE Holdings and developer Longfor Group leading losses.

Zerlina Zeng, head of Asia credit strategy at CreditSights, said banks “might be reluctant to extend additional funding to incomplete home projects as they still need to bear the credit risk”. She added that a large amount of the money lent up to August through the whitelist programme was for refinancing existing debt.

Jeff Zhang, an analyst at Morningstar, said he expected an “acceleration in execution, with more distressed developers receiving funds for home completions, which would help shore up homebuyers’ confidence”.

China’s housing market is still dominated by newly constructed homes that are bought before completion, though purchases have this year shifted to existing properties amid concerns over developer health. 

On Thursday, the housing minister said that since the end of September, the number of viewings and purchases of new homes had shown a “clear increase” and that transaction volume in the secondary market “continued to rise”.

New home prices in August fell at their fastest pace in nine years, with a 5.3 per cent drop across major cities, according to Reuters calculations.