Uber agrees to buy Delivery Hero in $14.8 billion stock deal
The proposed acquisition would expand Uber’s delivery reach across almost 100 markets, though it still needs shareholder support and could face scrutiny.
By Jordan Bell · Startups & Deals Reporter
· 3 min read
Uber has agreed to acquire Delivery Hero in a $14.8 billion all-stock transaction, a deal that would sharply expand its food-delivery reach outside China. For investors, the move is a scale play: Uber would add markets across Europe, the Middle East, Latin America and Asia as it competes with other global delivery platforms.
The companies announced the offer on Thursday, according to Uber. An all-stock deal means Delivery Hero shareholders would receive Uber shares rather than cash, tying the value of the transaction to Uber’s stock.
Delivery Hero, based in Germany, operates food-delivery businesses across a wide international footprint. Uber said the acquisition would bring its mobility and delivery services into many more overlapping markets, giving the company a larger combined network of riders, drivers, couriers, restaurants and customers.
The deal is not final
Uber said the offer includes a minimum acceptance condition of 50% plus one share of Delivery Hero’s outstanding share capital. In plain English, Uber needs holders of just over half of Delivery Hero’s shares to accept the offer before it can move ahead under that condition.
Prosus, a major Delivery Hero shareholder, has agreed to sell its 17% stake, according to Uber’s announcement. Uber was already Delivery Hero’s largest shareholder before the acquisition agreement, TechCrunch reported.
The transaction is expected to draw regulatory attention, TechCrunch reported. Food-delivery deals can raise competition questions when they combine large platforms in the same markets, especially where fewer rivals remain. The companies have not completed the purchase, and Uber’s announcement described the transaction as an acquisition offer rather than a closed deal.
Delivery Hero is also selling assets
Separately, Delivery Hero agreed to sell operations in 14 markets where Uber Eats already operates to SSW Partners, a New York-based investment firm, for $1.6 billion, according to the announcement. That side deal would remove some overlap between the two businesses in those countries.
If completed, the Delivery Hero acquisition would put Uber’s delivery platform among the largest in the world and possibly the largest outside China, according to TechCrunch. It would also extend Uber’s presence to nearly 100 markets across several regions.
Uber CEO Dara Khosrowshahi said in the company’s statement that the combination would “nearly double” the number of markets where Uber provides both ride-hailing and delivery services. He said Uber believes that wider platform can create long-term value for customers and shareholders.
The proposed deal would also give Uber a bigger position against DoorDash and Just Eat, TechCrunch reported. The main question for shareholders now is whether enough Delivery Hero investors tender their shares and whether regulators allow the combination to proceed.
This story draws on original reporting from TechCrunch.
