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.
Follow Aimee Donnellan on LinkedIn.
     
    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.

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