Uber to take over foodpanda in Taiwan

BENGALURU:

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 in a move that would boost liquidity of the delivery specialist grappling with rising competition in Asia.

Asia has become Delivery Hero’s biggest market after its $4 billion deal in South Korea in 2019 but the company has been trying to divest some of its assets in the region to improve profitability.

While food delivery services in Asia have largely rebounded from a slowdown following the pandemic boom, many firms are now grappling with thin margins as they spend heavily in offering discounts and promotions to retain consumers who have become wary of rising inflation and cost of living.

“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.

Published in The Express Tribune, May 15^th, 2024.

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