Delivery Hero, the multinational owner of Glovo, confirmed this Tuesday that it is in advanced negotiations with Uber Technologies regarding a possible acquisition offer, thus confirming the information reported by Bloomberg News which indicated that talks between the two last-mile delivery companies are in an advanced stage, to the point that they could be made public this very week.
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According to that media outlet, the operation would likely value Delivery Hero well above its recent stock price, which is around 36 euros per share.
Delivery Hero, headquartered in Berlin, has accumulated an increase of nearly 62% so far this year, placing its market capitalization at approximately 11.2 billion euros (12.8 billion dollars). Figures that the German company has avoided specifying, although it stated that any proposal would be directed to all of its shareholders.
Uber, which has not commented, sees its shares accumulate a drop of nearly 2% since the news leaked, while Delivery Hero’s shares closed the session with a gain of 5.76%, up to 39.10 euros.
The talks come after months of speculation about Delivery Hero’s future. According to various reports published in May, Uber then made an offer of 38 euros per share, a valuation that investors considered insufficient.
The acquisition of Delivery Hero would allow Uber to strengthen the Uber Eats network in Europe, the Middle East, Asia, and Latin America. However, the operation would also likely be subject to scrutiny by competition authorities due to the geographic overlap of both companies’ presence at a time of complicated geopolitical tensions between Europe and the United States.
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The slowdown in growth and intense competition have driven a consolidation process in the sector, in a context where companies seek to improve their margins.
Uber has also accelerated its diversification strategy beyond the passenger transport business. In recent years it has strengthened its food delivery division and expanded its presence in areas such as food product distribution, travel, and local commerce, in addition to recently entering the hotel booking business.
Earlier this year, the company announced the expansion of its food delivery service to seven new European markets, including Austria, Denmark, and Norway, with the expectation of generating an additional 1 billion dollars in gross bookings over the next three years.
Reuters reported at the end of May that Uber had increased its stake in Delivery Hero to nearly 37%, up from the previous 25%, after acquiring shares from fellow shareholder Aspex Management.
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