An Uber Technologies (UBER) acquisition of GrubHub (GRUB) would be both an "offensive and defensive move," Wedbush analyst Ygal Arounian tells investors in a research note following news reports of deal talks.

The analyst believes such a move by Uber would be an "aggressive" way to take out a major competitor on the Uber Eats front and further consolidate its market position, especially as the COVID-19 pandemic continues to shift more of a focus to deliveries versus ride-sharing in the near-term. If the two combined, Uber Eats and Grubhub would represent 55% market share in third-party food delivery, marking a clear leader in the space, adds Arounian. The analyst, who continues to expect the third-party delivery market to see growth and take share of overall restaurant consumption, would not rule out a bidding war with Doordash. It, too, will look into to whether it makes sense to purchase market dominance via GrubHub, says the analyst. Arounian keeps an Outperform rating on Uber with a $38 price target.