Uber, whose meal delivery business outperformed globally during the most recent quarter, aims to complete the all-cash deal by the first half of 2025. The acquisition, one of Taiwan’s largest outside of the chip industry, also marks a retreat for Delivery Hero from Asia.
Both parties stressed the takeover was contingent on regulatory approval — a potential wrinkle given Uber and Delivery Hero are now the two dominant players in the market.
Foodpanda and UberEats have been neck-and-neck in Taiwan’s food delivery space for years. As of August 2023, Foodpanda maintained a slight lead with 52% of food delivery order volume compared to UberEats, according to data from Measurable AI, a Hong Kong-based firm that tracks business receipts.
Uber is grappling with uncertainty over its ridesharing businesses in the US and Latin America. Gross bookings in the first quarter missed analysts’ estimates, while rivals including Lyft Inc and DoorDash Inc beat Wall Street’s expectations last quarter. Investors are focused on whether Uber can sustain double-digit growth with new product offerings.
Yet the delivery business, which has also seen moderating overall growth, proved a bright spot in the January to March period, surpassing expectations on gross bookings. Order frequency reached an all-time high.
Uber Eats has grown in major international delivery markets including Australia, France and Mexico, while adding new retail and grocery partners to its platform. A nascent but growing advertising business has also helped expand margins for the delivery business.
The deal unveiled Tuesday marks one of the biggest takeovers in Taiwan outside of semiconductors. Uber aims to combine the two businesses under the Uber Eats brand, and separately agreed to purchase US$300 million of newly issued Delivery Hero stock.
Foodpanda generated a gross merchandise value of about €1.6 billion and broke even on an adjusted basis over the 12 months ended March, the companies said in their statement.
Its parent has sought buyers for Foodpanda businesses beyond Taiwan, with less success. In February, the German company said negotiations to sell some of its operations in Southeast Asia had fallen through. On Tuesday, Delivery Hero said it hoped to use the proceeds from the deal to buy back convertible bonds.