Uber makes $14.8B takeover offer for German delivery giant Delivery Hero
Uber Technologies is looking to further expand its global reach through an acquisition that would make its delivery platform one of the largest in the world.
The provider of delivery and rideshare services entered into an agreement with Germany-based Delivery Hero which would extend Uber’s reach to a total of 99 markets. Under the terms of the voluntary takeover offer, Uber will offer Delivery Hero shareholders cash consideration of $47.49 per share, representing an equity value of $14.8 billion (implied for 100% of the company), or $13.7 billion adjusted for Uber’s prior stake purchases.
Uber says it will fund the deal through existing cash on its balance sheet and new debt financing.
Founded in 2011, Delivery Hero operates its service in approximately 65 countries across Asia, Europe, Latin America, the Middle East and Africa, bringing groceries and household goods to customers in under one hour and often in 20 to 30 minutes.
"Delivery Hero’s talented team has built an extraordinary business, with beloved local brands and leading positions across many of the world's fastest-growing delivery markets,” said Dara Khosrowshahi, CEO of Uber. “By bringing our platforms together, we will extend affordable, reliable delivery to many millions more people in many of the world’s most dynamic economies, while creating more opportunities for merchants and couriers.”
Delivery Hero has entered into a separate agreement with SSW Partners, a New York-based investment firm which will see it acquire Delivery Hero’s businesses in a total of 14 markets, particularly where Uber Eats and Delivery Hero already overlap, for a consideration of approximately $1.6 billion.
Uber says it will not acquire control over the businesses transferred to SSW, and SSW will independently lead the process to find strategic partners that “best position" the businesses for long-term success.
Uber has pledged to retain Delivery Hero’s headquarters and make no changes to its workforce in Berlin until at least 2029. Additionally, Uber has committed to invest €2 billion in Germany over the next five years, with a focus on developing its local corporate workforce, growing its nationwide business, and launching autonomous vehicle deployments and partnerships with the German automotive industry.
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“We are excited about this opportunity with Uber and the possibilities it offers for our employees, shareholders, and partners,” said Niklas Östberg, CEO of Delivery Hero. “Uber's global mobility and delivery platform and our shared commitment to innovation make this the right partnership to build on Delivery Hero's strengths in local food delivery and Quick Commerce, and to take our Everyday App strategy further for our customers.”
Advisors
Morgan Stanley & Co. LLC and Deutsche Bank are serving as lead financial advisors to Uber. Bank of America and Goldman Sachs are also serving as financial advisors to Uber. Freshfields and Wachtell, Lipton, Rosen & Katz are serving as legal counsel to Uber and Cooley LLP is serving as legal counsel to Uber in connection with the financing.
Affiliates of Morgan Stanley & Co. LLC, Bank of America and Deutsche Bank are providing the committed bridge facility to Uber. Evercore is serving as financial advisor to SSW. Paul Weiss, Hengeler Mueller, Baker Botts and Gibson Dunn are serving as legal counsel to SSW.
