Uber's R240bn Delivery Hero swoop is good news for Prosus

Uber's $14.8bn (R240bn) all-cash takeover of Germany's Delivery Hero, announced this morning, is the latest and largest deal in a wave of consolidation reshaping the food delivery industry after its pandemic-era overexpansion. It carries a direct South African angle: Prosus, majority-owned by Naspers and the JSE's largest constituent alongside its parent, holds just under 17% of Delivery Hero and has committed to tender its stake, locking in the takeover's success. Both Uber and Prosus feature in the BizNews Ricardo portfolios (USD and ZAR respectively), making this a deal worth watching on both counts..BizNews Reporter .News broke this morning that Uber Technologies - which is held in the BizNews Ricardo USD portfolio - is to buy Germany's Delivery Hero in an all cash offer valuing the food delivery group at roughly $14.8 billion (about R240bn). Buried in the announcement is a very South African footnote: Prosus, the Amsterdam- and Johannesburg-listed investment vehicle majority-owned by Naspers, is once again cashing out of European food delivery. Prosus is also in the BizNews Ricardo portfolio - the ZAR one. It’s a lucrative exit for Prosus, which holds just under 17% of Delivery Hero and has committed to sell its entire stake to Uber at the offer price. That guarantees the success fo the takeover as it takes Uber's total economic interest in the company to roughly 53%. It is the latest chapter in a restless few years for Prosus in the sector. In April, Uber bought €270 million of Delivery Hero shares directly from Prosus, part of a stake reduction Prosus was forced into to satisfy EU antitrust conditions after its own acquisition of Just Eat Takeaway.com for €4.1 billion last year. Having spent big to build a food delivery empire of its own, Prosus is now unwinding a chunk of it into a rival's takeover.For South African investors, this matters more than the headline numbers suggest. Naspers and Prosus remain the largest constituents on the JSE indices, and Prosus's food delivery bets have long been a swing factor in how the group's sum-of-the-parts valuation is judged by analysts and retail investors alike. A clean, irrevocable exit at a firm cash price removes a chunk of complexity and crystallises value from an investment that has had a bumpy ride through the sector's boom, glut and now consolidation phases. It also frees capital and management attention for Prosus's other bets, from classifieds to edtech and fintech, at a time when the group has been under pressure to simplify its portfolio and close the discount between its share price and its underlying assets.The Delivery Hero deal itself is best understood as the latest and largest move in a wave of consolidation sweeping an industry that expanded far too quickly during the pandemic. Dozens of delivery apps sprang up between 2020 and 2022, chasing the same customers, restaurants and couriers, in the process burning enormous sums on subsidies and marketing. That era is over. DoorDash bought Deliveroo last year for £2.9 billion. Prosus itself consolidated by buying Just Eat Takeaway. Now Uber is absorbing Delivery Hero, splitting off 14 overlapping markets, including Delivery Hero's Turkish arm Yemeksepeti and European units under SSW Partners, for about $1.6 billion to keep regulators comfortable.The logic of consolidation is straightforward and, on balance, sound for the industry. Food delivery is a scale business: the more densely a platform can pack riders, restaurants and customers into a market, the better its unit economics. Fewer, larger players mean less duplicated spending on marketing and driver incentives, and more room to bundle delivery with other services, in Uber's case through its Uber One membership alongside rides. Uber expects the deal to be enhance earnings immediately and meaningfully so within three years, evidence that scale genuinely lowers costs rather than simply reducing competition for its own sake. The transaction also gives Uber the Middle Eastern brands Talabat and HungerStation, as well as South Korea's Baemin, extending its reach into markets where it previously had no delivery presence..Read more:. FT: Uber’s next act: taking on Amazon.There are trade-offs. Fewer platforms could eventually mean less competitive pressure on the fees restaurants and couriers are charged, something regulators in Europe are likely to scrutinise closely before the deal closes, expected in the second half of 2027. But after years of loss-making overexpansion, a more consolidated, profitable food delivery industry, with Prosus banking a clean exit along the way, looks like a rational endpoint for a sector that badly needed one..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. 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Uber's R240bn Delivery Hero swoop is good news for Prosus

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