[Stay on top of transportation news: Get TTNews in your inbox.]
Uber is in advanced talks to acquire Delivery Hero
The deal would further consolidate food delivery
(Delivery Hero)
Key Takeaways:
- Uber is in advanced talks to acquire Delivery Hero and could reach a deal this week at a valuation above its recent 36-euro share price.
- The deal would further consolidate food delivery after pandemic-era growth slowed and competition, labor costs and shareholder pressure increased across the sector.
- Any agreement faces potential antitrust scrutiny because Uber and Delivery Hero overlap in parts of Europe and the Middle East.
Ride-hailing giant Uber Technologies Inc. is in advanced talks to acquire German food-delivery company Delivery Hero SE, people familiar with the matter said.
Uber aims to reach an agreement with Delivery Hero as soon as this week, according to the people. A transaction would likely value the German group well above its recent trading price of around 36 euros per share, some of the people said.
Shares of Delivery Hero have gained about 62% this year, giving the company a market value of 11.2 billion euros ($12.8 billion). Uber has already built a shareholding in Delivery Hero of 24.99%, plus derivatives that take its total interest to about 36.8%.
Uber has previously approached Delivery Hero with an offer of 33 euros per share, but investors have been betting that a higher price will be required to seal the deal. Amsterdam-listed internet investment firm Prosus NV also holds a significant stake in Delivery Hero.
Any deal is likely to attract scrutiny from antitrust regulators globally. Delivery Hero has a presence in more than 60 markets, and the company and Uber overlap in parts of Europe and the Middle East.
Image
Uber has previously approached Delivery Hero with an offer of 33 euros per share, but investors have been betting that a higher price will be required to seal the deal. (Stefan Wermuth/Bloomberg)
Deliberations are ongoing and a deal could still be delayed or fall apart, the people said, asking not to be identified because the information is private. Representatives for Uber and Prosus declined to comment. A spokesperson for Delivery Hero couldn’t immediately be reached for comment.
Strategic Review
Delivery Hero has been conducting a strategic review following pressure from shareholders, which include Aspex Management, the hedge fund that succeeded in ousting founder Niklas Östberg and has lobbied for more asset sales.
This comes as the food delivery sector consolidates globally, driven by slowing growth and heavy competition. A number of Delivery Hero’s peers in Europe have been targeted. DoorDash Inc. agreed to buy the U.K.’s Deliveroo Plc last year, while Prosus acquired Just Eat Takeaway.com NV.
Alex Fraser of Cox Fleet discusses how fleets should respond as roadside breakdowns test their safety, compliance and customer service systems all at once. Tune in above or by going to RoadSigns.ttnews.com.
Other suitors have been studying Delivery Hero or some of its assets. DoorDash and Saudi Arabian quick delivery startup Ninja have separately expressed interest in part or all of Delivery Hero’s Middle East business, people with knowledge of the matter have said.
Business surged for food delivery providers during COVID-19 lockdowns, prompting rapid expansion and investment, only to slow dramatically when restaurants and grocery stores reopened. Increasing regulatory scrutiny of so-called gig workers, treated as independent contractors without the same rights and protections as full-time employees, has also made labor more expensive.
Uber Freight ranks No. 16 on the Transport Topics Top 100 list of the largest logistics companies in North America.
Written by Ryan Gould, Eyk Henning, Vinicy Chan and Loni Prinsloo
