Uber’s $15B Delivery Hero Deal Wins Board Backing
Synopsis
Uber’s roughly $15 billion takeover of Delivery Hero has won board backing, moving the deal closer to completion and potentially creating one of the world’s largest food-delivery platforms outside China.
Delivery Hero’s management and supervisory boards have recommended that shareholders accept Uber’s roughly $15 billion takeover offer, bringing the two companies closer to a deal that would create one of the world’s largest food-delivery platforms outside China.
After reviewing the proposal, Delivery Hero’s boards said the transaction was in the best interests of the company, its shareholders, employees and other stakeholders.
They also described the offer price as “fair and adequate”, while saying the combination could accelerate product innovation.
Uber Expands Global Delivery Reach
The deal would significantly strengthen Uber’s position in food delivery. Uber was already Delivery Hero’s largest shareholder before launching the offer and has set a minimum acceptance threshold of 50% plus one share of Delivery Hero’s outstanding share capital.
Prosus, another major investor, has also agreed to sell its roughly 17% stake in Delivery Hero as part of the transaction. Meanwhile, Delivery Hero has agreed to sell its businesses in 14 markets where Uber Eats already operates to New York-based investment firm SSW Partners for approximately $1.6 billion.
The restructuring is designed to reduce overlap between the two businesses while allowing Uber to expand its delivery operations across markets where Delivery Hero has a stronger presence.
Food Delivery Enters New Consolidation Phase
The proposed takeover comes amid increasing consolidation across the global on-demand delivery industry. Companies are seeking greater scale as competition intensifies and profitability remains a challenge across several markets.
Over the past 18 months, Uber agreed to acquire Turkey-based Getir’s delivery operations for $335 million. Grab agreed to buy Delivery Hero’s Foodpanda business in Taiwan for $600 million in cash, while DoorDash agreed to acquire UK-based Deliveroo for $3.87 billion.
For Uber, the Delivery Hero transaction could provide greater scale against rivals such as DoorDash and Just Eat Takeaway, while giving the company a broader international delivery network.
The deal still requires shareholder approval and must clear applicable regulatory conditions before completion.
Source: TechCrunch
Vishal is an experienced Editor at Inspirepreneur Magazine with key interests in artificial intelligence, eCommerce, entrepreneurship, lifestyle and startup sector. Prior to joining Inspirepreneur, he was a Content Writer cum Correspondent at Siliconindia Magazine, where he worked on Company Profiles, Cover Stories, Executive Profiles, Feature Articles and Thought Leadership content.
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