Uber Launches $14.8 Billion Takeover Bid for Delivery Hero
The ride-hailing giant aims to expand its international food delivery network through the acquisition.
Uber has initiated a public takeover offer for German food delivery company Delivery Hero, valuing the company at approximately $14.8 billion. This move is part of Uber's strategy to broaden its food delivery operations internationally.
The offer stipulates a minimum acceptance threshold of 50% plus one share. Uber is proposing to pay $47.58 in cash for each Delivery Hero share. The transaction is contingent on meeting this acceptance level. Shares of Delivery Hero saw an increase of around 5.7% in premarket trading in Frankfurt following the announcement.
The proposed takeover price represents a premium of roughly 34% over Delivery Hero's three-month volume-weighted average share price prior to the announcement. Delivery Hero's shares closed at €38.18 on Wednesday.
Delivery Hero has agreed to divest a portion of its business, spanning 14 markets, to the U.S.-based investment firm SSW Partners for approximately €1.4 billion. The company confirmed on Tuesday that it was in advanced discussions with Uber regarding a potential takeover.
Major shareholder Prosus has committed to selling its stake, which is just under 17% of Delivery Hero, according to Uber. Including derivatives, Uber had already secured a stake of just under 37% in Delivery Hero prior to this public offer.
An acquisition of Delivery Hero would significantly expand the Uber Eats food delivery network across Europe, the Middle East, Asia, and Latin America. However, the combination of the two companies is likely to draw scrutiny from antitrust regulators due to overlapping market presence.