Uber M&A takeaway may need a bigger bite

DoorDash

26/05/2026 11:02

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
By Aimee Donnellan
DUBLIN, May 26 (Reuters Breakingviews) - Food delivery companies know the value of a topped-up order. Uber UBER.N may therefore be willing to apply that logic to its pursuit of Delivery Hero DHER.DE, currently worth €11.4 billion. The returns on such a deal may be slim, but CEO Dara Khosrowshahi has ways to lighten the cost by selling off overlapping businesses. More importantly, the acquisition would give the $146 billion Uber an edge in its intensifying battle with arch-rival DoorDash DASH.O.
Uber already owns around a fifth of Delivery Hero, helped by a European ruling that is forcing investor Prosus to trim its stake after an acquisition. Over the weekend, Delivery Hero confirmed its board had received an offer of €33 a share from Uber, while the Financial Times separately reported that Khosrowshahi had approached one of Delivery Hero's largest shareholders with an offer of €38 a share, implying a total value of €11.5 billion. It's not clear whether Uber plans to make a bid at that level or simply seek to acquire a stake large enough to fend off any rival, which could be gradually increased over time.
On the face of it, the return on a €38 a share bid would be pretty ropey. Using the €860 million of operating profit analysts polled by LSEG expect the company to deliver in 2030, a €14 billion offer including debt would only yield a 4.3% return after tax, before factoring in synergies. That’s far below the company’s estimated 8% cost of capital.
Khosrowshahi would have ways, however, to lighten the outlay. Delivery Hero has a sprawling global empire, which could be broken up. That includes Talabat TALABAT.DU, a listed UAE delivery company in which the German group has an 80% stake, which is currently worth €6 billion, but could fetch as much as €9 billion in an auction, one investor told Breakingviews. Perhaps the most logical region to sell would be Europe, which is not growing as fast as the Middle Eastern or American businesses, and which Berenberg values at €1.6 billion. The brokerage's analysts estimate the sum of Delivery Hero's parts at just under €40 per share, implying ample scope for Uber to pay more than the €38 reported by the Financial Times.
Perhaps the most compelling argument for a full takeover is scale. A deal could lift Uber's gross annual bookings from over $100 billion to over $160 billion within a year, a leap that would put it well ahead of DoorDash, its $70 billion rival. The latter has been aggressively pushing beyond its home market, snapping up Deliveroo for $3.9 billion and Wolt for $8 billion in 2022. If he wants to avoid falling behind, Khosrowshahi's best option may be to dig deeper.
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CONTEXT NEWS
Uber is weighing a raised takeover bid for rival Delivery Hero after its initial €33-per-share offer on May 24 was rebuffed, a report from the Financial Times said.
Delivery Hero, which has faced major shareholder pressure over strategy and earlier in May said its CEO would step down in March 2027, had said on May 24 that Uber had reached out with an indicative proposal of 33 euros per share.
Shares in Delivery Hero were trading at €37.63 by 0852 GMT on May 26.

Uber offer is nearly double where Delivery Hero was recently trading https://www.reuters.com/graphics/BRV-BRV/klpylwdeavg/chart.png
(Editing by Neil Unmack; Production by Shrabani Chakraborty)
((For previous columns by the author, Reuters customers can click on DONNELLAN/Aimee.Donnellan@thomsonreuters.com))