Uber Technologies has recently proposed acquiring the remaining shares of its European competitor, Delivery Hero, at a price of €33 per share. According to an analysis by Citi Research, given that Uber currently holds approximately 37% of Delivery Hero's equity, a full acquisition could potentially unlock up to €1.4 billion in cost synergies. This move would also grant Uber access to key food delivery markets in regions such as South Korea, the Middle East, and Latin America.
Citi analyst Ronald Josey commented, "While we acknowledge the potential operational risks associated with an acquisition, we believe Uber remains capable of investing in autonomous driving, its delivery business, and continuing its capital return program, provided its core operations remain strong." The projected cost synergies are expected to stem primarily from reductions in cost of sales, marketing, and IT expenses. The largest portion is anticipated to come from Delivery Hero's estimated administrative expenses of €2.2 billion by 2027.
"Considering Uber's global technology platform is scalable with the size of an acquisition, we note that the synergy potential in IT costs could even surpass its annual IT expenditure of €500 million to €600 million," Josey added. He reaffirmed a 'Buy' rating on Uber and suggested investors consider the stock amid its recent pullback. Since Uber reported better-than-expected first-quarter results and second-quarter guidance, its share price has declined by 10%.
This further supports his view that Uber, leveraging its 50 million Uber One members, expansion into new geographic regions and markets, and the deployment of its autonomous driving strategy in new areas, is well-positioned to continue delivering total bookings and profitability that exceed expectations. The acquisition saga, which could reshape the global food delivery landscape, continues to unfold with a pattern of incremental offers.
On May 23, Delivery Hero formally confirmed in a regulatory filing that Uber had submitted a preliminary, non-binding offer to all shareholders at €33 per share, valuing the company at approximately €10 billion. However, this price was slightly below Delivery Hero's closing price that week and was collectively rejected by shareholders.
According to sources familiar with the matter, Uber CEO Dara Khosrowshahi had previously flown to Oslo, Norway, to meet with Delivery Hero's supervisory board chair, Kristin Skogen Lund, to present the €33 per share offer in person. Following this cool reception, Uber subsequently raised its offer to €38 per share to a major shareholder, implying an enterprise value exceeding €11.5 billion and representing a premium of about 15.3%—yet this too was rejected.
Several Delivery Hero shareholders have explicitly stated that they expect a final offer price of no less than €40 per share, valuing the company around €13 billion, which would represent a premium of approximately 19% over last Friday's closing price. Jefferies analyst Giles Thorne noted, "Multiple stakeholders are still holding out for a price above €40 per share, making the next move very difficult to predict, especially given the significant antitrust issues involved."
Concurrently, competitor DoorDash has quietly entered the fray, having approached relevant Delivery Hero shareholders to gauge interest in a potential acquisition. While it has not purchased any shares, its intentions are clear, particularly regarding Delivery Hero's Middle Eastern operations. As the bidding contest intensifies, Uber has already skillfully built a significant equity position through a series of capital maneuvers.
As early as April, Uber acquired approximately 4.5% of Delivery Hero's shares from Dutch investment group Prosus for €270 million. By May, Uber's direct stake in Delivery Hero had significantly increased from about 7% to 19.5%, making it the German food delivery giant's largest single shareholder, with an additional option interest of about 5.6%.
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