(new: structure, share, analysts)

BERLIN (dpa-AFX) - After months of negotiations, the food delivery service Delivery Hero has now got rid of its Foodpanda business in Taiwan after all. This means that the company has achieved at least a partial success in its plans to sell the business in the region. The US ride-hailing and delivery service Uber wants to acquire the business in a multi-stage deal, Delivery Hero announced in Berlin on Tuesday. The US company will also acquire a small stake in Delivery Hero. While the MDax company is thus creating financial freedom for itself, the US group is expanding its position in Taiwan.

The news was initially received very positively on the stock market. The Delivery Hero share price rose by up to almost 22 percent to 30.77 euros in morning trading. Since the turn of the year, Borsen's value has thus risen by around a fifth to 8.3 billion euros - unlike three years ago: Since the Corona highs at the beginning of 2021, the shares have fallen in price by more than 70 percent.

Foodpanda Taiwan is to go to Uber for 950 million US dollars (888 million euros), according to the Delivery Hero press release. Delivery Hero CEO Niklas Östberg is likely to settle for less than he had previously hoped for according to a media report: at the end of February, Wirtschaftswoche reported that the purchase price demanded was "well over one billion dollars".

At the same time, the US group will acquire a stake of just under three percent in Delivery Hero. To this end, around 8.4 million new shares are to be sold to Uber for 33 euros each via a capital increase. The heavily indebted German company will thus receive 278 million euros. The deal is expected to be completed in the first half of 2025.

Jefferies industry expert Giles Thorne praised the sale: "A perfectly timed exit with compelling upside and significant downside protection," he wrote in an initial reaction. However, he warned of lengthy antitrust investigations, as the merger would effectively create a monopolist in the food delivery market. Depending on the data set, Foodpanda currently owns between 50 and 55 percent of the market in Taiwan, with the rest belonging to Uber.

UBS analyst Jo Barnet-Lamb noted that the Taiwan deal comes two weeks after the announcement that Sachem Head founder Scott Ferguson is to join the supervisory board of Delivery Hero. The activist investor Sachem Head had previously demanded a say on the supervisory board and, according to its own information, holds 3.6 percent of the food delivery service via shares and derivatives.

With the sale, Delivery Hero is making at least a small step forward in its plan to withdraw from Asia. In addition to Taiwan, Foodpanda is active in several countries in Southeast Asia, including Singapore, Malaysia, the Philippines, Thailand, Cambodia, Myanmar and Laos.

However, Delivery Hero was unable to reach an agreement with its unknown interested parties - one of the negotiating partners was the delivery and food delivery service Grab, which is also the top dog in the region.

This had not made it easy for Delivery Hero to gain a foothold in the region anyway. In the past, it was common practice in the industry for all market players to compete with each other for customers by offering discounts. Delivery Hero and its Baemin brand left Vietnam at the beginning of December.

Although Asia is by far Delivery Hero's most important segment in terms of revenue, South Korea accounts for the lowest share and growth is lagging well behind the other major regions.

"The decision to break off negotiations after months was made after careful consideration," said CEO Östberg at the end of February. Previously, Emmanuel Thomassin, still CFO, had told the financial news agency dpa-AFX that he saw no time pressure in selling the business. "We don't have to sell Foodpanda, even if that would be an advantage for our liquidity".

This was the long-standing manager's response to investor concerns that Delivery Hero's cash flow was not sufficient to service its debts from its own resources. Thomassin will join the British fintech Wise on October 1, 2024 /ngu/zb/stk