Uber Technologies, Inc. (UBER.US) plans to fully acquire Germany's Delivery Hero to strengthen its online food delivery presence in Europe.

According to insiders, Uber Technologies, Inc. is exploring the possibility of acquiring the German company Delivery Hero. If the deal goes through, it will help Uber compete better with DoorDash in markets outside the United States. The ride-hailing giant revealed this week that it has increased its stake in the Frankfurt-listed company. Sources say that Uber is working with a team of professional advisors to plan on increasing its stake further, as well as engaging in discussions with other shareholders of Delivery Hero regarding the acquisition. Uber Technologies, Inc. said on Monday that through purchasing stocks and related financial instruments, it currently holds a direct stake of 19.5%, along with a 5.6% option interest. Insiders reveal that Morgan Stanley assisted Uber in quickly increasing its stake using derivative instruments. Since the beginning of the year, Delivery Hero's stock price on the Frankfurt Stock Exchange has increased by nearly 50%, with a market value of approximately 10.2 billion euros, equivalent to 11.8 billion US dollars. During Friday's stock trading session, Uber Technologies, Inc.'s stock price dropped by approximately 3%, marking a new low in over a month. Uber Technologies, Inc. stated this week that there are currently no plans to increase its stake to 30% or more, but they will regularly evaluate their investments and are not ruling out further increases if attractive options arise. Insiders say that once Uber's stake reaches a certain threshold, they will need to pass through an anti-monopoly review. Negotiations are ongoing, and it is uncertain whether the acquisition deal will be finalized. Both Uber Technologies, Inc. and the relevant officials at Morgan Stanley declined to comment on the matter, and Delivery Hero has also not responded. According to compiled data, among the other major shareholders of Delivery Hero, Prosus NV holds approximately 16.8%, and Aspex Management holds 14.4%. Regulatory filings on Friday also showed that Morgan Stanley collectively holds a 30% stake in the company, with most of it held through equity swaps. Acquisition intentions surfaced Berenberg Bank analyst Wolfgang Speicher pointed out in a research report that after Uber Technologies, Inc. increased its stake, the investment value logic of Delivery Hero has undergone a substantial change, and the potential value of a full acquisition should now be included in the valuation considerations. To strengthen its presence in international markets, Uber Technologies, Inc. has been carrying out cross-border mergers and acquisitions, while its primary competitor in the US, DoorDash, is also expanding its overseas business. With operations in over 60 countries, Delivery Hero could help Uber Technologies, Inc. fill gaps in the European market and compete with DoorDash's Wolt delivery division, which focuses on the European market. At the same time, based in Berlin, Delivery Hero has been undergoing strategic evaluations under investor pressure, and has been studying solutions to improve its financial and operational conditions. Under the pressure of the activist investor Aspex, the CEO of the company, Niklas Ostberg, has decided to resign. Aspex had urged the company to sell assets or change management. Delivery Hero is not the only German company facing potential acquisitions through derivative instruments to rapidly increase their stake. Italian bank UniCredit had taken a similar approach, accumulating a significant minority stake before launching a full takeover bid for the German commercial bank; these series of transactions were also assisted by Morgan Stanley. Additionally, Bank of America Corp had helped Saudi Telecom Company acquire nearly 10% of Telefonica SA Sponsored ADR stock in 2023.