Uber will acquire German food delivery company Delivery Hero for $14.8 billion (about 22 trillion won). As a result, Baemin, the domestic delivery app operated by Delivery Hero, will also be folded into Uber.
Uber said on the 16th that it signed a business combination agreement with Delivery Hero. Uber will launch a tender offer, paying €41.5 per share in cash to Delivery Hero shareholders.
The acquisition proposal values the company at about $14.8 billion based on 100% of Delivery Hero's equity. Excluding the Delivery Hero shares Uber already bought, the actual additional purchase price is about $13.7 billion (about 20 trillion won).
When the transaction is completed, Uber will also acquire major delivery platforms held by Delivery Hero, including Baemin and Foodpanda.
However, some markets where Uber Eats and Delivery Hero overlap will be carved out from the acquisition. Delivery Hero will sign a separate agreement with investment firm SSW Partners and plans to sell businesses in a total of 14 markets for about $1.6 billion (about 2.3 trillion won).
Uber will not secure management control over the businesses transferred to SSW Partners. The move is seen as a measure to ease the burden of business combination reviews by competition authorities in each country due to overlap among delivery platforms.
Uber plans to fund the acquisition with cash on hand and new debt. It also said it signed a bridge loan agreement of about €14 billion (about 23.7 trillion won).
Uber said it will maintain an investment-grade credit rating after the transaction and manage its net debt to EBITDA ratio to below 2 times based on free cash flow. It will also keep its shareholder return policy through share repurchases.
Dara Khosrowshahi, Uber's chief executive officer (CEO), said, "By combining the two platforms, we will provide affordable, reliable delivery services to millions of people in some of the world's most dynamic economies, and create more opportunities for merchants and couriers."