Uber opens talks to acquire food delivery firm Deliveroo

Uber opens talks to acquire food delivery firm Deliveroo

By Giles Turner, Dinesh Nair and Eric Newcomer

Uber Technologies is in early talks to buy food-delivery company Deliveroo for several billion dollars, according to sources.

A bid for London-based Deliveroo, last valued at more than $2bn (€1.7bn), would mark a major attempt by Uber to dominate the food-delivery business in Europe.

An acquisition price is unknown. Any offer would need to be considerably above its latest valuation.

The talks could fall apart, in part because Deliveroo and its investors have been reluctant to relinquish independence, sources said.

Spokesmen at Deliveroo and Uber declined to comment.

Although little-known in the crowded US market, which it has avoided, Deliveroo is ubiquitous in Europe’s capitals.

The service is available in more than 200 cities on four continents.

Shares in rival food delivery companies dropped yesterday. FTSE 100 company Just Eat dropped as much as 9% in early trading before closing down 34p, or 4.8%, at 674p.

Uber chief executive Dara Khosrowshahi has made the company’s food-delivery business a top priority ahead of a planned IPO in the second half of 2019.

The San Francisco-based company is weighing other acquisitions, too. It’s in talks with Middle Eastern ride-sharing rival Careem, according to sources.

After selling its ride-hailing businesses in south-east Asia, China and Russia, Uber is eager to buy competitors, rather than sell its remaining local businesses.

Deliveroo is one of Europe’s biggest startups and last year raised about $480m from investors including Fidelity Investments and T Rowe Price Group.

The company competes directly with Uber Eats, Uber’s food delivery business.

Deliveroo was in financing talks last year with SoftBank, one of Uber’s major investors.

The negotiations abruptly ended after SoftBank concentrated on backing Uber.

If it goes through, the acquisition would be the latest example of a European or Middle Eastern startup falling into foreign hands.

Over the past two years, Apple acquired music-identification service Shazam for about $400m, despite initial concern from European regulators; Amazon snapped up Dubai-based online retailer Souq for $580m, shocking locals; and Chinese travel giant Ctrip International agreed to buy Scottish flight-booking site Skyscanner for $1.7bn.

- Bloomberg

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