Delivery Hero in advanced talks with Uber over potential takeover

Delivery Hero confirmed on Tuesday that it is engaged in advanced negotiations with Uber Technologies concerning a potential takeover offer, validating earlier media reports about the U.S. ride-hailing and food-delivery giant's pursuit of the German firm.

The confirmation follows a Bloomberg News report indicating Uber was in advanced talks to acquire Delivery Hero, with a potential agreement possibly reached this week. Sources suggest a deal would likely value Delivery Hero substantially higher than its recent trading price of around 36 euros per share. The Berlin-based company has seen its stock climb approximately 62% this year, reaching a market capitalization of roughly 11.2 billion euros ($12.8 billion).

While Delivery Hero declined to comment on the offer price, it stated that any potential bid would be extended to all shareholders. Uber also declined to comment. In response to the news, Uber's shares saw a nearly 2% dip, while Delivery Hero's stock closed 5.76% higher at 39.10 euros.

These discussions emerge after months of speculation surrounding Delivery Hero's future. Reports indicate Uber had previously approached the company in May with an offer of 38 euros per share, which investors reportedly deemed too low. An acquisition of Delivery Hero would significantly broaden Uber Eats' network across Europe, the Middle East, Asia, and Latin America. However, the substantial overlap in their operational footprints is expected to draw the attention of antitrust regulators.

The food delivery industry is experiencing a wave of consolidation, driven by slowing growth and intense competition, as companies strive for improved profit margins. Uber has been actively diversifying beyond ride-hailing, bolstering its food delivery business and expanding into areas like groceries, travel, and local commerce, including a recent foray into hotel bookings. Earlier this year, Uber announced an expansion of its food delivery services into seven new European markets, projecting an additional $1 billion in gross bookings over the next three years.