Delivery Hero Not Considering Offer For Deliveroo
Delivery Hero has said that it is not considering making an offer for its British rival, Deliveroo, days after the German company acquired a 5.09% stake in the London-listed online food delivery company.
Food Delivery Services
Demand for food delivery surged during lockdowns, but that could take a hit as restaurants reopen.
Many companies have also been teaming up to bolster their services and get access to new markets in the face of competition.
Delivery Hero cannot bid for Deliveroo for six months, according to British takeover rules, but the Frankfurt-listed company said it could choose to make an offer with the agreement of Deliveroo's board and under some other circumstances.
Founded in 2011, Delivery Hero operates in approximately 50 countries, with particular strength in Asia, where it owns the Foodpanda brand.
However, it does not operate in Britain, which is Deliveroo's largest market.
Despite a jump in sales, Delivery Hero and Deliveroo continue to make losses.
South Korea's GS Retail Consortium To Buy Delivery Hero's Food Delivery App, Yogiyo
The above news coincides with news that South Korea's GS Retail Co Ltd has said that it has partnered with two private equity firms to buy Delivery Hero's food delivery app, Yogiyo, in a deal valued at 800 billion won ($686.41 million).
The deal is expected to further intensify competition in the world's third-largest online food delivery market, which is growing at a record pace since the COVID-19 pandemic started spreading in the country.
Yogiyo is the second-largest food delivery app in South Korea, with a 25% market share, and its sale was part of the condition to win regulatory approval for Delivery Hero's $4 billion acquisition of Woowa, which owns industry leader Baedal Minjok.
The consortium, which includes PE firms Affinity Equity Partners and Permira, will buy existing shares in Delivery Hero Korea, the operator of Yogiyo, and infuse an additional 200 billion won, GS Retail said in a statement.
GS Retail's investment will be a total of 300 billion won and includes a 30% stake, it said in a statement.
The company plans to combine Yogiyo's strength in delivery with its 16,000 retail stores and 60 logistics centres to deliver a range of products.
Still, it has formidable competitors in Woowa's app and Coupang Eats, the food delivery arm of e-commerce leader Coupang that has rapidly grown since its launch in 2019 to take the number three spot.
Mobile food delivery orders nearly doubled to 1.92 trillion won in June from a year earlier, the fastest growth rate among all e-commerce segments, according to data from Statistics Korea.