Uber in $1.25 bn deal to take over Delivery Hero's Foodpanda business in Taiwan

Uber announced on Tuesday a $1.25 billion deal to take over Delivery Hero's Foodpanda business in Taiwan and buy new shares in the German firm.

Following its $4 billion acquisition in South Korea in 2019, Delivery Hero's largest market is now Asia. Still, in an effort to increase profitability, the firm has been looking to sell up some of its assets in the area.

"We need to focus our resources on other parts of our global footprint, where we feel we can have the largest impact for customers, vendors and riders," Niklas Ostberg, CEO and co-founder of Delivery Hero, said in a joint statement.

Under the deal, Uber will take over the Foodpanda business in Taiwan for $900 million in cash and purchase $300 million in newly issued shares of Delivery Hero at 33 euros each, a 30% premium to its closing share price on Monday.

The U.S. company expects the acquisition to contribute at least $150 million annually to the adjusted core profit of its delivery business within a year of closing, likely in the first half of 2025.

Online food delivery platforms represent a small fraction of Taiwan's competitive food delivery market but the Foodpanda operations in the island were break-even in terms of adjusted core earnings in the last 12 months ended March 31, the companies said.

The business processed transactions worth 1.6 billion euros ($1.73 billion) during that period.