Uber to buy Germany's food delivery firm Delivery Hero in $14.8 billion deal: Report

Uber-Delivery Hero deal: Uber has reportedly agreed to acquire German food delivery company Delivery Hero SE in a deal pegged at $14.8 billion.

It’s buying out significant Delivery Hero shareholder, Amsterdam-listed Prosus NV, as part of the deal.

As part of the deal, investment firm SSW Partners will acquire 14 markets for about $1.6 billion. SSW will find buyers for the assets, which include units in Austria, Norway, Spain, and Sweden, separately.

Uber on overseas acquisition spree

The food delivery market, which boomed during the Covid-19 pandemic and spawned dozens of players, has been rapidly consolidating in recent years. Uber has been making acquisitions overseas to strengthen its position internationally, where hometown rivals like DoorDash Inc. are making similar moves. DoorDash agreed to buy the UK’s Deliveroo Plc last year, while Prosus struck a deal to acquire Just Eat Takeaway.com NV, the Bloomberg report added.

Acquiring Delivery Hero would widen the Uber Eats food-delivery network in Europe, the Middle East, Asia and Latin America, but would also attract attention from antitrust regulators given the overlap in the companies' presence, Reuters reported.

The divestment is aimed at addressing overlap between the companies' operations and could help smooth the path for regulatory approvals.

Delivery Hero's management board and supervisory board said they supported the proposal and intended to recommend shareholders accept ⁠the offer after reviewing the formal offer document, the report added.

‘Food delivery business is highly competitive’

"The food delivery business is highly competitive and scale dependent," Delivery Hero Supervisory Board Chair Kristin Skogen Lund was quoted as saying by Reuters.

"Joining forces with a strong partner now is the right move for Delivery Hero to best ⁠secure its future competitiveness."

The offer is expected to be completed in the second half of next year.

Delivery Hero on Tuesday confirmed it was in advanced negotiations with Uber regarding a potential takeover offer.

Major shareholder Prosus has agreed to sell its stake ⁠of just under 17 per cent in the food delivery company, according to Uber, which had already secured exposure to nearly 37 per cent of Delivery Hero shares, including through derivatives.

Uber's total economic interest in Delivery Hero would amount to more than 53 per cent after the tender commitment.