(March 23): Grab Holdings Ltd agreed to buy Delivery Hero SE’s Foodpanda operations in Taiwan for US$600 million ($769.61 million), a deal that marks its first foray outside of its Southeast Asian base.
The cash acquisition will allow Grab to expand into 21 cities across Taiwan, the Singapore-based ride-hailing and delivery company said in a statement on Monday. Grab expects the transaction to be completed in the second half, subject to regulatory approvals.
The purchase will give Grab a presence on the island of about 23 million people, helping it to expand beyond its intensely competitive home market. Grab has seen growth slow dramatically as it takes steps to focus on profitability.
Shares of Delivery Hero were up 1.4% at 10.14am in Frankfurt on Monday after gains of as much as 4.4% earlier. Grab slid about 1% in trading before markets opened in New York.
The management of Germany-based Delivery Hero is under pressure from several of its largest shareholders to conduct a strategic review amid wider industry consolidation. Investors including Hong Kong hedge fund Aspex Management, its second-biggest shareholder, have pushed for a sale or divestments to streamline the business.
Single country divestitures or minority stake sales in businesses would not go far enough, Aspex wrote previously in a letter to Delivery Hero’s chief executive officer Niklas Östberg. The company’s shares have fallen about 35% in the last year.
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Delivery Hero’s previous attempt to sell its Taiwanese unit to Uber Technologies Inc failed after the island’s antitrust regulators rejected the acquisition. Uber terminated the deal, valued at US$950 million, last year.
Grab, meanwhile, is seeking new sources of growth after an increased customer base left it with less room for user gains. It introduced novel product offerings and made acquisitions to bring in more consumers in a challenging economy. The Foodpanda deal is expected to contribute at least US$60 million in incremental adjusted earnings before interest, taxes, depreciation and amortisation in 2028, Grab said.
In Southeast Asia, Grab has been exploring a takeover of Jakarta-based GoTo Group, which could help ease competition. The years-long effort has been delayed by regulatory scrutiny as well as differences over perceived valuation. In the latest hurdle for a deal, negotiations stumbled over wireless carrier Telkomsel’s roughly 2% stake in GoTo.
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Shares of Grab remain far below their initial price in its 2021 listing. The company has also taken steps to expand beyond ride hailing and delivery, betting on new initiatives in areas such as digital finance.
Uploaded by Tham Yek Lee
