Delivery Hero sinks after Taiwan blocked sale of unit to Uber

Investing.com -- Delivery Hero AG (ETR:DHER ) shares fell sharply on Friday, marking their biggest decline in two weeks, after Taiwan blocked the sale of its local subsidiary to Uber Technologies (NYSE:UBER ).

Taiwan’s Fair Trade Commission found that Uber’s planned acquisition of Foodpanda could harm market competition.

Uber had aimed to finalize the $950 million deal by mid-2025. The deal would have been one of Taiwan’s largest outside the semiconductor sector and signaled Delivery Hero’s shift away from certain Asian markets.

The stock fell around 9% to €26 in Frankfurt trading, but recovered some ground later, trading at €26.98 as of 04:59 ET (09:59 GMT).

The Berlin-based company, which saw rapid expansion during the pandemic, has been scaling back and restructuring in response to pressure from activist investors. In early December, Delivery Hero spun off its Middle Eastern unit, Talabat Holding Plc, in Dubai’s biggest IPO of the year, raising $2 billion.

In a statement Wednesday, Delivery Hero said Uber may appeal the decision or abandon the deal. Uber expressed disappointment but reaffirmed its commitment to investing in Taiwan.

“Even if Uber does appeal, we’re not convinced it would be successful given the market share math that always felt like it was going to be an issue from the get-go and has certainly now proved to be,” Bernstein analysts commented. “TBD what the breakage fee is if the deal stops here.”

They note that this development is “modestly negative” for Uber, as the company “was going to be in a good position to create value from the combined entity by reducing competitive intensity and consolidating fixed costs.”

In terms of the impact on Uber stock and forecasts, analysts believe it should be “minimal.”

Source: Investing.com