Uber acquires Foodpanda Taiwan for $950 million, strengthening its Asian market hold

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In a move to solidify its dominance in the Asian market, Uber Technologies is acquiring Delivery Hero’s Foodpanda business in Taiwan for a whopping US$950 million. This strategic takeover, slated to be finalized by mid-2025, underscores Uber’s ambitious expansion plans in the region.

Announced on Tuesday, this deal represents one of the most significant acquisitions in Taiwan outside the semiconductor industry. Uber plans to integrate Foodpanda’s operations under its UberEats brand, further strengthening its position in the competitive food-delivery market. In addition to the acquisition, Uber has also agreed to purchase US$300 million worth of newly issued Delivery Hero stock.

Foodpanda, which boasted a gross merchandise value of about €1.6 billion (US$1.7 billion) and broke even on an adjusted basis over the past year, has been a formidable player in Taiwan’s food-delivery scene. This acquisition signifies Delivery Hero’s gradual retreat from the Asian market, with the company previously facing challenges in selling some of its Southeast Asian operations. The deal’s completion hinges on regulatory approval, which could be a significant hurdle given that Uber and Delivery Hero are the leading competitors in Taiwan’s food-delivery sector.

Delivery Hero, headquartered in Berlin, aims to utilize the proceeds from this deal to repurchase convertible bonds, signaling a strategic realignment. Despite a slight edge held by Foodpanda in Taiwan with 52% of the order volume as of August 2023, UberEats has been a relentless competitor, and this acquisition is poised to reshape the market dynamics.

Uber’s ride-hailing segment has faced headwinds in the United States and Latin America, with first-quarter gross bookings missing analyst expectations. However, Uber’s food-delivery division has been a beacon of growth, surpassing expectations and achieving record order frequency in the first quarter of the year.

Globally, UberEats has expanded its footprint in key markets such as Australia, France, and Mexico, while also diversifying its offerings to include retail and grocery delivery. The burgeoning advertising business within UberEats has further boosted profit margins, indicating a robust growth trajectory.

As Uber fortifies its position in Taiwan and eyes further expansion, all eyes will be on the regulatory landscape and the company’s ability to sustain its growth momentum in an increasingly competitive global market.

(Source: WSJ | Financial Times)

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