Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Key Takeaways
- Uber has formally bid €33 per share for Delivery Hero, valuing the company at over €10 billion, but faced immediate rebuff as shareholders seek significantly higher valuations, potentially exceeding €40 per share.
- Rival DoorDash is also actively pursuing Delivery Hero, with a primary interest in its high-growth Middle East (Talabat, HungerStation) and Turkish (Yemeksepeti) assets, though a full takeover bid remains a possibility.
- The unfolding drama highlights intense consolidation pressures in the global food delivery sector, influenced by activist investor demands for streamlining, the complex interplay of existing shareholder stakes, and the looming shadow of regulatory scrutiny.
The global food delivery market is once again thrust into the spotlight, signaling a new wave of aggressive consolidation as industry giants jostle for dominant positions and seek pathways to sustainable profitability. Delivery Hero, the Berlin-based food delivery behemoth, confirmed on Saturday that it had received an unsolicited takeover proposal from Uber Technologies, valuing the company at over €10 billion. This revelation, following reports by the Financial Times, immediately set the stage for a high-stakes bidding war, underscored by the simultaneous and equally determined interest from rival DoorDash.
Uber’s Strategic Advance and Shareholder Resistance
Uber CEO Dara Khosrowshahi’s direct approach, reportedly flying to Oslo to meet Delivery Hero’s supervisory board chair Kristin Skogen Lund, underscores the strategic importance Uber places on this acquisition. Khosrowshahi floated an indicative price of approximately €33 per share. However, this initial overture was swiftly rebuffed, with Delivery Hero stating it would remain “fully focused on executing its strategic review process.” The board’s stance reflects a significant divergence in valuation expectations, as several current shareholders have indicated they would seek a price above €40 per share. This premium, representing a 19 percent uplift on Delivery Hero’s closing price on Friday, could push the company’s valuation towards €13 billion, highlighting the perceived untapped value within its diverse portfolio of assets, particularly its high-growth emerging market operations.
Uber’s interest is not a nascent development. The company disclosed on Monday that it already holds a substantial 19.5 percent stake in Delivery Hero, along with a further 5.6 percent in derivatives. This pre-existing position, acquired incrementally—including a €270 million share purchase from Prosus in April—gives Uber significant leverage and a blocking minority in certain corporate actions under German rules, potentially complicating any rival bids. Morgan Stanley is understood to be advising Uber on its bid, with the bank itself disclosing a 27 percent interest in Delivery Hero, primarily through equity swaps, further intertwining financial interests in this complex, multi-layered deal.
DoorDash Enters the Fray for High-Value Assets
Adding another layer of intense competition, DoorDash, the leading food delivery platform in the United States, has also been actively “circling” Delivery Hero. Sources familiar with the matter reveal that DoorDash CEO Tony Xu has made contact with Lund and engaged in discussions with multiple Delivery Hero shareholders. While DoorDash has explored a full takeover bid, its primary interest appears to lie in Delivery Hero’s lucrative Middle East and North Africa (MENA) business, which includes highly profitable brands like Talabat and HungerStation, and its robust Turkish arm, Yemeksepeti. The group’s 80 percent stake in Talabat alone is reportedly valued by some shareholders at up to €9 billion, almost matching Uber’s initial full company bid. DoorDash’s strategic focus on these specific high-growth regions aligns with its broader international expansion ambitions, following its £2.9 billion acquisition of Deliveroo last year, cementing its aggressive push beyond its dominant domestic market and into new geographies with significant potential for scale and profitability.
Valuation Gaps, Activist Pressure, and Strategic Review
The stark difference between Uber’s initial offer and shareholder expectations underscores the perceived undervaluation of Delivery Hero’s assets by the broader market. The company’s board is currently weighing a full sale against a series of strategic divestments, including spinning off its Middle East and South Korea divisions, as part of an ongoing strategic review. Notably, Uber had also separately made enquiries about Delivery Hero’s South Korean arm, in a joint bid with local internet giant Naver, valuing the unit around €4.6 billion. The combined estimated value of these key business units (MENA and South Korea) already exceeds Uber’s initial full company offer, lending significant credence to shareholders’ demands for a higher overall price and highlighting the sum-of-the-parts valuation strategy being pursued.
This strategic review is not occurring in a vacuum. Delivery Hero has faced sustained pressure from activist investor Aspex Management, which holds a 14.6 percent stake. Aspex has long advocated for streamlining operations, accelerating asset sales, and leadership changes, culminating in the recent announcement that founder and CEO Niklas Östberg will depart by March 2027. This internal pressure creates an imperative for the board to unlock significant shareholder value, making a major M&A event or strategic restructuring increasingly likely in the near term, as the company grapples with a path towards sustainable profitability after years of aggressive expansion.
Regulatory Hurdles and Market Consolidation Dynamics
The global food delivery sector has been undergoing rapid consolidation, driven by the intense need for scale to achieve profitability in a notoriously capital-intensive business, characterized by thin margins and fierce competition. Recent examples include DoorDash’s acquisition of Deliveroo and Prosus’s €4.1 billion acquisition of Just Eat Takeaway. However, regulatory scrutiny, particularly in the European Union, remains a critical factor that can significantly shape market structure. Prosus, previously Delivery Hero’s largest shareholder, was compelled to reduce its holding due to EU antitrust requirements linked to its Just Eat takeover. Prosus, still holding a 16.8 percent stake, has publicly criticized European regulators for inadvertently creating opportunities for American competitors by forcing such divestments, thereby reshaping the European tech landscape. Any potential takeover by Uber or DoorDash would undoubtedly face intense antitrust review, particularly given the scale of the acquiring companies and their existing market footprints, raising concerns about market concentration and consumer choice.
The situation remains highly fluid. Both Uber and DoorDash’s discussions are described as exploratory, and there is no guarantee that any agreement will be reached, or that regulatory bodies will approve a transaction. Uber’s existing stake, however, gives it a unique strategic advantage, allowing it influence over significant corporate decisions while navigating German takeover rules that would mandate a full offer if its stake crosses the 30 percent threshold. The race to acquire Delivery Hero, or its most prized assets, exemplifies the intense competition and complex strategic maneuvers defining the future of last-mile logistics, where market leadership and scale are paramount.
Market Impact
The unfolding bidding war for Delivery Hero underscores the relentless drive towards consolidation in the global food delivery sector, signaling a maturing industry where scale and market share are critical determinants of long-term viability. A successful acquisition, whether a full takeover by Uber or DoorDash, or a strategic carve-out of key assets, would significantly alter the competitive landscape, potentially leading to fewer, larger players dominating key regions and further pressuring smaller, regional operators. For investors, this saga highlights the tension between growth-at-all-costs strategies and the increasing demand for profitability, particularly from activist shareholders who are pushing for decisive action to unlock value. It could signal further M&A activity among second-tier players, or even regional challengers, as they seek to gain scale and operational efficiencies to compete against these emerging giants. The outcome will also serve as a crucial test case for how regulators balance market concentration with innovation and consumer choice, particularly in regions where antitrust concerns have already shaped major deals. Furthermore, the substantial premium sought by Delivery Hero’s shareholders could re-rate valuations for comparable assets globally, emphasizing the strategic value of established delivery networks in high-growth markets that offer a clear path to profitability. Ultimately, this battle is not just about acquiring a company, but about shaping the future power dynamics of a multi-trillion-dollar digital economy, with profound implications for consumers, competitors, and capital markets alike.