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Delivery Hero shares soar after Uber agrees to buy Taiwan business for $950 mln

Published 05/13/2024, 11:14 PM
© Reuters.
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Investing.com -- Uber Technologies (NYSE:UBER) said on Tuesday it had reached an agreement with German food delivery firm Delivery Hero (ETR:DHER) to take over the latter’s foodpanda business in Taiwan for $950 million in cash.

Shares in Delivery Hero soared by more than 20% in European trading following the announcement.

The deal will see foodpanda being folded into the Uber Eats platform, and is subject to regulatory approval. Uber said it expects the deal to close in the first half of 2025, until which Delivery Hero will continue operating foodpanda. 

Separately, Uber and Delivery Hero also reached an accord that will see Uber buy $300 million in newly issued ordinary shares of Delivery Hero. 

Reports earlier this year said the two companies had stopped negotiations over the sale of Delivery Hero's Asian operations. It was not immediately clear whether the sale included foodpanda's operations in Southeast Asia.

Delivery Hero has been courting buyers for its Asian units as it moves to streamline its operations and better focus on its core European market.

The move also gives Uber more headway in the food delivery business, particularly in Asia, where Uber Eats faces stiff competition from local players.

In a note to clients, analysts at Jefferies said that the "transaction economics" were attractive for both companies. However, they flagged that, because it creates a "de facto food delivery monopoly," the purchase is likely to be closely scrutinized by regulators.

Ambar Warrick contributed to this report.

 

 

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