Uber agrees to buy German food delivery firm Delivery Hero for 12.7 billion euros

German food delivery company Delivery Hero has agreed to be acquired by U.S. ride-hailing and delivery giant Uber in a deal valued at 12.7 billion euros. This move represents a significant consolidation in the increasingly competitive food delivery market.

Uber, which already held a substantial stake in Delivery Hero, seeks to secure a majority ownership of the Berlin-based firm. Niklas Östberg, CEO and co-founder of Delivery Hero, stated that Uber's global platform and commitment to innovation make the partnership the "right choice" to leverage Delivery Hero's strengths in local food delivery and quick commerce.

This acquisition follows a trend of consolidation in the sector, with notable deals including DoorDash's purchase of Deliveroo and Prosus's acquisition of Just Eat Takeaway. The offer price of 41.50 euros per Delivery Hero share represents a premium of approximately 34% over the average share price in the last three months, though the company's stock saw a slight decline upon the announcement.

Delivery Hero, founded in 2011 and experiencing accelerated growth during the COVID-19 pandemic, has never achieved profitability. To address its debt, the company will also divest operations in 14 countries across Europe and South America to SSW Partners for 1.4 billion euros. Uber has committed to maintaining Delivery Hero's independent management and protecting its employees for three years, alongside a pledge to invest two billion euros in Germany by 2031.