Uber and DoorDash in Exploratory Talks to Buy Delivery Hero

According to sources familiar with the matter, Uber (UBER) and DoorDash have held separate exploratory talks with investors in German food delivery company Delivery Hero, potentially setting the stage for a bidding war. The move comes as major delivery firms seek to expand their European footprint.

Deal Details

• Expected Value: Not yet disclosed, but Delivery Hero's market cap is around €8 billion.
• Nature of Talks: Preliminary and non-binding, involving discussions with major shareholders.
• Competition: Both Uber and DoorDash may vie for the acquisition, each aiming to strengthen its position in Europe.

Rationale

Uber and DoorDash are looking to expand in Europe, where Delivery Hero has a strong presence in Germany and other markets. The acquisition could provide economies of scale and help compete with rivals like Just Eat Takeaway.

Regulatory Challenges

Any deal is likely to face intense regulatory scrutiny from European competition authorities, given Delivery Hero's dominance in Germany. Conditions such as asset divestitures may be imposed.

Impact on Stocks

No immediate market reaction has been observed, but analysts expect significant moves in Uber, DoorDash, and Delivery Hero shares upon official announcement. The deal is seen as positive for Delivery Hero, while acquisition costs may weigh on Uber and DoorDash.