Uber Technologies Inc. is evaluating a potential full takeover of Delivery Hero SE, according to sources familiar with the matter. This strategic move would enable Uber to compete more effectively with DoorDash Inc. in international markets outside the United States.
Stake Increase and Options
This week, Uber disclosed that it had increased its stake in the Frankfurt-listed Delivery Hero. The ride-hailing giant now owns 19.5% of the company after acquiring additional shares and instruments, along with a further 5.6% in options. Uber is working with advisers to explore ways to further increase its holding and has been in discussions with other Delivery Hero investors about its interest in a deal.
Market Impact
Delivery Hero shares have surged nearly 50% in Frankfurt trading this year, giving the company a market value of approximately €10.2 billion (US$11.8 billion). Uber stated this week that while it currently has no intention to raise its stake to 30% or more, it periodically reviews its investments and may purchase more if an attractive opportunity arises.
Uber may need to seek antitrust approval before crossing certain ownership thresholds. Deliberations are ongoing, and there is no certainty that they will lead to a final agreement. Representatives for Uber and Morgan Stanley declined to comment, while Delivery Hero's spokesperson did not immediately respond.
Major Shareholders
Other large shareholders in Delivery Hero include Prosus NV with around 16.8% and Aspex Management with roughly 14.4%, according to Bloomberg data. Morgan Stanley holds a 30% interest in Delivery Hero, primarily through equity swaps, as per a regulatory filing.
Strategic Rationale
Uber has been pursuing acquisitions overseas to strengthen its international presence, especially as rivals like DoorDash make similar moves. Delivery Hero operates in over 60 countries, which could provide Uber with valuable insights into markets where it lags behind DoorDash's Wolt unit, particularly in Europe.
Meanwhile, Delivery Hero has been assessing options to improve its finances and operations amid investor pressure for a strategic review. CEO Niklas Östberg has decided to step down following pressure from activist investor Aspex, which had urged asset sales or his departure.
Similar Approaches
Delivery Hero is not the first German company to see a potential acquirer quickly build a stake using derivatives. Italian lender UniCredit SpA used a similar method to amass a significant minority stake in Commerzbank AG before making a full takeover bid, with Morgan Stanley facilitating the trades. The U.S. bank also helped Saudi Telecom Co. build a nearly 10% stake in Spain's Telefonica SA in 2023.
Analyst Wolfgang Specht of Berenberg noted that the investment case for Delivery Hero may have materially changed after Uber increased its holding, and it now seems prudent to consider scenarios including a potential takeover.
