Uber's $15 billion Delivery Hero takeover clears board hurdle

Boards recommend the offer

Delivery Hero's supervisory and management boards have approved Uber's $15 billion takeover offer and are advising shareholders to accept it, according to TechCrunch. The recommendation clears an important internal hurdle for a deal that would fuse two of the industry's biggest operators into a single on-demand food delivery giant.

After reviewing the bid, the boards concluded that the transaction serves the interests of the company, its shareholders, its employees and other stakeholders. They also judged the price to be fair and saw potential for the combination to speed up product development across the merged business.

A doubled footprint for Uber

According to TechCrunch, the acquisition would roughly double the size of Uber's global presence and build a delivery platform that ranks among the largest in the world outside China. It would also leave Uber better placed to compete with DoorDash and Just Eat Takeaway, the report notes.

Uber was already Delivery Hero's largest shareholder before making the bid. The offer carries a 50-percent-plus-one-share acceptance condition on Delivery Hero's outstanding share capital, meaning at least a simple majority of that capital must be tendered for the deal to proceed.

Shareholders and divestments line up

Prosus, another major Delivery Hero investor, has agreed to sell its 17 percent stake as part of the transaction, TechCrunch reports. That commitment hands Uber a substantial block of acceptances toward its threshold.

The takeover bid also follows an earlier restructuring. Delivery Hero had previously agreed to sell its operations in 14 markets where Uber Eats already operates to SSW Partners, a New York-based investment firm, for $1.6 billion. Those divested businesses narrow the overlap between the two companies' delivery networks ahead of the combination.

The largest move in a consolidating wave

TechCrunch situates the deal within a broader consolidation push in on-demand delivery over the past 18 months. In that window, Uber agreed to acquire Turkey-based Getir for $335 million, Grab announced a $600 million cash purchase of Delivery Hero's Foodpanda business in Taiwan, and DoorDash committed to paying $3.87 billion for the UK's Deliveroo.

Measured by price, the Delivery Hero acquisition would dwarf those earlier transactions and stand as the sector's biggest consolidation move of the period.

Why it matters

The board endorsement moves one of the largest food delivery takeovers in recent memory toward completion, but the outcome now rests with shareholders, who must meet the 50-percent-plus-one-share acceptance condition. If they do, the combined company would run one of the biggest delivery networks in the world outside China and hold considerably more bargaining power with restaurants, couriers and consumers than either business commands alone.

The deal also signals where the industry is heading. With Uber, Grab and DoorDash all absorbing rivals within 18 months, the on-demand market is consolidating around a small number of global platforms, and the advantages of scale — denser courier networks, larger restaurant selections, more delivery data — tend to compound. For DoorDash and Just Eat Takeaway, an Uber with twice its current footprint raises the competitive stakes across the markets where both companies operate. For restaurants and couriers, having fewer independent platforms to work through could mean less leverage in commission and pay negotiations as concentration increases.