In a bid to expand further, Uber Technologies UBER has entered into a business combination agreement to acquire Delivery Hero. This move is aimed at expanding its mobility and delivery platform to 99 markets with combined pro forma gross bookings of $236 billion in 2025.
Under the voluntary takeover offer, Uber will pay €41.50 per Delivery Hero share, valuing the latter at approximately $14.8 billion, or $13.7 billion after adjusting for the former's existing stake. Before the offer, Uber owned about 24.77% of Delivery Hero's voting shares and had an additional 11.74% economic exposure through equity derivatives. Prosus has agreed to tender its roughly 17% stake, raising Uber's total economic interest to about 53%.
As part of the transaction, SSW Partners, a New York-based investment firm, will acquire Delivery Hero's operations in 14 markets where the business overlaps with Uber Eats is more significant. The transaction, valued at about $1.6 billion, will allow SSW to independently identify long-term strategic owners for those businesses, while Uber will acquire Delivery Hero's operations across 50 markets, representing approximately $42 billion in 2025 gross bookings.
Uber expects the acquisition to strengthen the global technology platform by combining it with Delivery Hero's established local brands, merchant network and delivery capabilities. The combined business is anticipated to enhance consumer choice, improve the Uber One membership proposition and provide merchants with greater demand through Uber's large user base, supported by advertising, promotional and commerce tools. A denser network is also expected to increase order volumes, improve courier utilization and create additional earning opportunities for delivery partners and drivers.
The acquisition would nearly double the number of markets where Uber operates both mobility and delivery services, increasing the total from 34 to 58. According to the company, customers using both services generate roughly three times the gross bookings and profits of single-product users. Uber expects the transaction to be accretive to adjusted earnings per share upon closing and deliver high-single-digit percentage earnings accretion by the third year.
Delivery Hero's management and supervisory board support the proposed transaction, describing it as an opportunity to strengthen the competitive position, build on the food delivery and quick commerce businesses, and advance the Everyday App strategy through Uber's global platform.
Uber has also committed to maintaining Delivery Hero's Berlin headquarters and preserving its workforce there through at least 2029. In addition, the company plans to invest €2 billion in Germany over the next five years to expand its local operations, strengthen the corporate workforce and support autonomous vehicle deployments and partnerships with the German automotive industry.
Uber will finance the acquisition using existing cash and new debt through a committed bridge facility of about €14 billion while maintaining its investment-grade credit rating and current capital allocation policy, including share repurchases. The transaction remains subject to shareholder approval, regulatory clearances and other customary conditions and is expected to close in the second half of 2027.
How Uber Stands to Gain
If completed, the acquisition would significantly strengthen Uber's competitive position by expanding its presence in fast-growing international markets where Delivery Hero holds leading positions. The deal would accelerate Uber's cross-platform strategy by increasing opportunities to convert delivery customers into mobility users and vice versa, driving higher engagement and revenue per customer.
Greater geographic scale, broader merchant relationships and a larger courier network could also improve operating efficiency, reinforce Uber's leadership in the global delivery market and support long-term earnings growth.
The proposed acquisition supports Uber's ambition to bolster its global food-delivery business as it faces intense competition from the likes of DoorDash DASH, which continues to pursue rapid international expansion.
Earlier this year, DoorDash and Uber’s rival Lyft LYFT expanded their partnership into Canada, allowing DashPass members to receive discounts on Lyft rides. The move broadens DashPass from a food delivery subscription into a wider lifestyle membership. Canadian members can access benefits such as discounted rides, airport trip savings and priority pickups after linking their accounts.
The partnership marks the first international rollout of DoorDash and Lyft’s collaboration, building on their U.S. success. Lyft, which operates in Canada’s 10 largest cities, aims to strengthen its market presence while DoorDash enhances customer value beyond food and grocery delivery.
UBER’s Share Price Performance, Valuation and Estimates
Shares of UBER have declined in double digits over the past six months. Courtesy of the downbeat performance, UBER’s shares have underperformed the Zacks Internet-Services industry over the same time frame.
6-Month Price Comparison
From a valuation standpoint, UBER trades at a 12-month forward price-to-sales of 2.36X. UBER is inexpensive compared with its industry.
See how the Zacks Consensus Estimate for Uber’s earnings has been revised over the past 90 days.
Uber’s Zacks Rank
Uber currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Uber Technologies, Inc. (UBER): Free Stock Analysis Report
Lyft, Inc. (LYFT): Free Stock Analysis Report
DoorDash, Inc. (DASH): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).