German online food delivery company, Delivery Hero, announced on Friday that it is acquiring full ownership of its Saudi subsidiary, HungerStation, in a deal valued at $297 million. This transaction involves purchasing the remaining 37% stake in HungerStation, which currently operates Delivery Hero in Saudi Arabia. The move reflects Delivery Hero’s strategic initiative to strengthen its position in the Middle Eastern food delivery market and expand its presence in the region.
During afternoon trade, Delivery Hero’s shares experienced a 1.4% decline. Despite this, Niklas Östberg, the CEO and Co-Founder of Delivery Hero, expressed confidence in the Kingdom of Saudi Arabia’s 2030 vision, ambition, and potential. In a statement, he emphasized the company’s commitment to contributing to the kingdom’s ongoing success through its subsidiary HungerStation.
With a market value of $10 billion, Delivery Hero stands as one of Europe’s largest food delivery companies. However, the firm faced challenges in its home market of Germany, ultimately having to exit the market in December 2021 due to fierce competition and losing to the Netherlands-based Just Eat Takeaway.com.
The food delivery industry is marked by intense competition, with numerous companies vying for market share. As a result, consolidation has become inevitable, leading to various firms acquiring competitors as a strategic move to attain greater scale and prominence in the market.
According to a statement released on Friday, HungerStation serves as a bridge, linking over 10,000 partners, which include restaurants and grocery stores, to customers. In light of this, Delivery Hero emphasized that this deal will play a vital role in establishing stronger connections not only with HungerStation but also with the broader portfolio of the company.
