Over the weekend of May 23-24, Delivery Hero confirmed that Uber has made an indicative bid of 33 euros per share for the entire company. This values Delivery Hero at approximately 10 billion euros, equivalent to around 108 billion Swedish kronor.
The bid was rejected. According to information from the Financial Times, Uber subsequently investigated the interest in an increase to 38 euros per share with several of Delivery Hero's major shareholders, but even this level was reportedly denied.
On the Frankfurt Stock Exchange, the share traded up 12 percent to 37.60 euros during Tuesday morning. The fact that the share is trading above the initial bid level of 33 euros indicates that the financial market expects the price tag to be adjusted upwards before an agreement can be reached.
Uber’s Positioning
The acquisition attempt comes after a period in which Uber has gradually increased its influence in the German company. On May 18, it was announced that Uber had reached a direct ownership of 19.5 percent, as well as controlling an additional 5.6 percent of the shares through financial instruments.
In connection with the bid becoming public, Delivery Hero published a statement regarding the process:
The company remains fully focused on implementing its strategic review. Further updates will be provided when necessary or appropriate.
Competition Law Reviews Await
Investment bank Bank of America highlights in a new analysis that the single biggest challenge for the deal is the competition law review. Uber and Delivery Hero today have overlapping operations in twenty countries. This means that a merger will require approvals from a number of international competition authorities, which may lead to demands for the sale of specific assets.
The food delivery market is currently in a broader consolidation phase. The industry is characterized by squeezed margins and a reduced inflow of external venture capital, making it more difficult for smaller players to remain independent. Analysts see Uber's move as a way to defend its market shares against competitors such as DoorDash, which last year completed an acquisition of British Deliveroo and has previously shown interest in parts of Delivery Hero's business.
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