Uber-Expedia combination ‘could make sense at a high level,’ at Mizuho

Commenting on Financial Times’ report that Uber (UBER) has explored a possible acquisition of Expedia (EXPE), Mizuho says that such a combination “could make sense at a high level,” with both companies related to travel, prior management experience, and ease of cross-selling from higher-frequency to lower-frequency items. However, the back-end synergies from such a deal “are less apparent,” as the online travel agency, or OTA, business needs a separate sales operation and front-end consumer integration could be challenging, the analyst tells investors. The analyst, who believes an expansion into grocery delivery at scale “would be more logical, pending change to the regulatory landscape,” maintains an Outperform rating and $90 price target on Uber shares and a Neutral rating and $140 price target for Expedia.