Uber has initiated a takeover bid valued at $14.8 billion for Delivery Hero
Uber has initiated a $14.8 billion offer for Delivery Hero, establishing the largest food-delivery company globally, excluding China.
Uber has initiated a public takeover bid for the German food-delivery firm Delivery Hero, in a transaction valued at $14.8 billion that would establish the largest food-delivery company globally, excluding China.
The US ride-hailing giant announced on Thursday that it is offering €41.50 ($47.58) in cash per share, which represents a 34% premium to Delivery Hero’s three-month volume-weighted average share price prior to the takeover announcement.
The acquisition represents a crucial advancement in Uber’s strategy to enhance its global food-delivery operations as competition escalates, especially from competitor DoorDash, which has been rapidly expanding into international markets.
If finalized, the merged entity would function in 99 countries, with an anticipated gross merchandise value (GMV) of $236 billion by 2025, as stated in a joint announcement from both companies.
Uber has made the offer contingent upon obtaining approval from shareholders holding at least 50% plus one share of Delivery Hero.
Delivery Hero shares initially increased by approximately 5.7% in premarket trading in Frankfurt following the announcement but subsequently reversed direction, trading around 1% lower shortly after the market opened.
The proposed acquisition would greatly enhance Uber Eats’ presence in Europe, the Middle East, Asia, and Latin America. However, the deal is anticipated to undergo rigorous examination by antitrust regulators because of overlapping operations in multiple markets.
To address competition concerns, Delivery Hero has consented to divest a portion of its business spanning 14 markets to US investment firm SSW Partners for around €1.4 billion.
As part of the agreement, Uber pledged to invest €2 billion in Germany by 2031 and committed to keeping Delivery Hero’s headquarters in Berlin, along with its workforce, until at least 2029.
Delivery Hero’s management and supervisory boards have expressed their support for the transaction and plan to recommend that shareholders accept the offer following their review of the formal offer document.
“The food delivery business is characterized by intense competition and a reliance on scale,” stated Delivery Hero Supervisory Board Chair Kristin Skogen Lund.
“Collaborating with a robust partner at this time is the optimal strategy for Delivery Hero to effectively ensure its future competitiveness,” she added.
The transaction is anticipated to finalize in the latter half of next year, pending shareholder approval and regulatory clearance.
Delivery Hero confirmed earlier this week that it was in advanced negotiations with Uber regarding a potential takeover.
Uber announced that its major shareholder, Prosus, has consented to divest its stake of nearly 17% in Delivery Hero. In conjunction with current holdings and derivative exposure, Uber has effectively attained economic exposure to almost 37% of the company’s shares. After the tender commitment, Uber’s overall economic interest would surpass 53%, enhancing its ability to finalize the acquisition.
