BERLIN – Delivery Hero confirmed talks on a partial sale of its Asia business on Wednesday, adding that the deal’s value is still under negotiation.
The Wirtschaftswoche business magazine first reported the news earlier in the day, saying Singapore’s Grab could pay a little more than €1 billion (S$1.46 billion) for the unit.
The Berlin-based company plans to sell its activities under the foodpanda brand in Singapore, Cambodia, Laos, Malaysia, Myanmar, the Philippines and Thailand, it said in a statement.
Investors in the online takeaway food company welcomed the report, lifting its shares by as much as 13.5 per cent on Wednesday.
Grab did not immediately reply to an e-mailed request for comment.
Delivery Hero has been focusing on reaching profitability while maintaining growth as investor confidence in the company started to wane after a pandemic-driven boost.
The group has said that it reached an adjusted earnings before interest, taxes, depreciation and amortisation in the first six months of the year, although it did not quantify it, after a loss of €323 million recorded in the same period a year earlier.
While the Asia business is Delivery Hero’s largest revenue driver, it is struggling to maintain momentum.
Its chief executive Niklas Oestberg said in August that the company had “pulled back a little bit” in the region following years of heavy investments in order to focus on profitability.
“But it also means that some customers are probably a little less excited about what we can offer today,” he said at the time.
Delivery Hero shares rose 7 per cent to €31.89 in Frankfurt trading on Wednesday, after earlier touching €33.82, the biggest intraday gain since November. The stock has declined 28 per cent in 2023.
Mr Oestberg in August said that Asia was the segment where the company saw most opportunity to invest.
Singapore technology company Grab posted US$567 million (S$774 million) in revenue in the quarter that ended June 30 and expects to break even on an adjusted core earnings basis in the current quarter.
Grab makes most of its sales from its food delivery business and has recently seen strong growth in its ride-hailing services.
REUTERS, BLOOMBERG
