Written by Steve Goldstein
Foodpanda business to be sold for $950 million
Delivery Hero shares rose on Tuesday after the German-listed food delivery company agreed to sell its Taiwan operations and minority stake to Uber Technologies.
Delivery Hero, which operates in 70 countries, has agreed to sell its Foodpanda business to Uber (UBER) for $950 million, with Uber also selling Delivery Hero at a 30% premium to Monday's closing price. agreed to acquire a $300 million stake in
Delivery Hero shares (XE:DHER) soared 24% to €31.47. Uber stock fell 1% premarket.
Foodpanda achieved break-even earnings before interest, taxes, depreciation and amortization through March 31st, with a total circulation of 1.6 billion euros.
Jefferies analyst Giles Thorne called the move a “perfectly timed exit” for Delivery Hero, saying GMV's exit multiple of 0.6x compares favorably with Delivery Hero's overall exit multiple of 0.2x. he pointed out.
He noted that the deal would be subject to strict antitrust scrutiny in Taiwan, where Foodpanda and Uber Eats essentially split the delivery market in two.
Bernstein analysts led by Nikhil Devnani say a partnership with Uber not only reduces competition, but also consolidates fixed costs and increases the value of the platform.
“UBER's $300 million in DHER shares may benefit regardless of developments regarding Taiwan, but ultimately is a use of capital related to this transaction,” they added.
Uber said consumers stand to benefit from the combination of Uber's broad selection in northern Taiwan and major metropolitan centers and Foodpanda's relative strength in southern Taiwan and smaller cities.
Uber also said that if completed, it would be one of the largest international acquisitions in Taiwan ever, outside of the semiconductor industry.
-Steve Goldstein
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05/14/24 0835ET
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