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Delivery Hero, the German-based food delivery behemoth, has announced the termination of talks regarding the potential sale of its Foodpanda business in selected Southeast Asian markets. The decision comes after months of negotiations with an undisclosed third party, where both parties failed to reach an agreement on the terms of the deal.
The company first confirmed its intention to sell business segments in countries including Singapore, Malaysia, the Philippines, Thailand, Cambodia, Myanmar, and Laos back in September. This decision coincided with a strategic move by Delivery Hero to streamline operations and enhance agility, which also involved a wave of layoffs.
Niklas Östberg, CEO and co-founder of Delivery Hero, emphasized that the decision to terminate negotiations was made after careful consideration. The company did not disclose the identity of the prospective buyers involved in the discussions. However, there were previous reports suggesting Grab, a key competitor, as a potential buyer.
Just last week, Östberg expressed contentment in retaining the Foodpanda brand after Delivery Hero’s share price took a hit following reports of failed negotiations.
Despite challenges faced by Delivery Hero’s business in Asia due to the easing of COVID-19 restrictions, the company’s revenue growth remained flat for the final quarter of 2023 compared to the previous year. However, Delivery Hero highlighted that its operations in the region are now operating at break-even level.
In a statement on Wednesday, Östberg reiterated confidence in the Asian market’s potential for profitable growth, stating that the region remains strongly positioned to drive growth at scale.
Delivery Hero emphasized its openness to mergers and acquisitions, stating that it will continue to explore potential alternatives that can create value for shareholders with high certainty of closing. The company affirmed that the decision to end Foodpanda’s sale talks will not impact its guidance reinstated in February.
In January, Delivery Hero announced the sale of approximately a 4.5% stake in rival online food delivery group Deliveroo.