Uber Builds Large Stake In Germany's Delivery Hero As Takeover Speculation Builds

Uber is exploring a potential takeover of Delivery Hero after building a large stake in the rival German food delivery company, Bloomberg News reports. This follows an earlier report that Uber had built a 19.5% stake.

On Monday, Uber disclosed that it owns 19.5% of Delivery Hero, plus an additional 5.6% through options. The position was built with the help of Morgan Stanley traders, according to people familiar with the matter.

Uber's move to acquire Delivery Hero could be an attempt to expand Uber Eats' global footprint and improve its competitive position against DoorDash outside the US.

Delivery Hero operates in more than 60 countries, giving Uber exposure to markets where it is either underscaled or trailing its competitors.

Map of Operatoins of Delivery Hero Brands

"While Uber's ultimate intentions on further stake-building remain unclear, we view the move as a clear endorsement of the strategic attractiveness of Delivery Hero's asset base for Uber," JPMorgan analysts wrote in a note.

Earlier, Uber said it "currently" has no intention of increasing its stake in Delivery Hero beyond 30%.

Delivery Hero shares in Frankfurt are up nearly 50% this year and have more than doubled from their March lows of around 15 euros. Uber shares were marginally lower in early afternoon trading.

Berenberg analyst Wolfgang Specht wrote in a note that Delivery Hero's investment case has changed following news of Uber's stake. He said it now seems prudent to assign value to scenarios that include a potential takeover.