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Naspers buys R10bn stake in German online food group Delivery Hero

JOHANNESBURG — South Africa’s biggest company, Naspers, is starting to make some serious investments in some big name internet companies. Yesterday, the company confirmed that it will take a 24 percent stake in Germany’s Delivery Hero. The online food delivery group is a leader in 36 markets around the world. In many ways, Naspers has transformed itself from a newspaper publisher into a high-tech investment fund manager. This is certainly a deal to keep an eye on moving forward. – Gareth van Zyl

By Stefan Nicola and Loni Prinsloo

(Bloomberg) – Naspers agreed to pay 660 million euros ($775m) to boost its stake in Germany’s Delivery Hero AG as Africa’s biggest company increases its exposure to the online food-delivery market.

The Cape Town-based media and technology business will buy stock from Rocket Internet SE at 29.50 euros a share, it said in a statement on Thursday. That’s a discount of 12 percent based on Wednesday’s closing price, making the South African company the biggest investor with a 24 percent holding.

“The increasing portion of consumer spend that the segment attracts represents an attractive growth opportunity for us,” Meloy Horn, a spokeswoman for Naspers said in an emailed response to questions. The business model has “attractive financial returns and untapped potential in geographies that are familiar to Naspers, all combine to make it a strong investment proposition.”

The deal strengthens Naspers’s position in internet food delivery, with Delivery Hero sitting alongside iFood in Brazil, Swiggy of India and Mr Delivery in South Africa in the company’s portfolio. Naspers has become one of the world’s largest investors in e-commerce ventures as it tries to build on the success of its early stage investment in Chinese technology giant Tencent Holdings, which is now worth about $136bn. It’s also Africa’s largest pay-TV provider.

Reinforcing Value

“It’s another company in the developing world portfolio and reinforces the value sitting in Naspers,” Michael Treherne, a money manager at Johannesburg-based Vestact, said by phone. Delivery Hero is the food delivery market leader in 36 of 42 markets around the world.

A logo of Naspers Ltd. sits on the side of the headquarters of the Media24 Ltd. building in Cape Town, South Africa, on Friday, Aug. 30, 2015. Dijkís $54 billion media company attributes about 80 percent of its value to a single Chinese investment, yet heís more concerned about getting Africans to watch Naspers Ltdís new video-on-demand service than about Chinaís economic slowdown. Photographer: Graeme Williams/Bloomberg

The company is seeing potential for growth across a broad range of the regions, Horn said. “Significant growth has already occurred in Western Europe and North America, but Asia, Latin America, and the Middle East, among other markets that Naspers operates in, are at the beginning of the growth cycle,” she said.

Naspers shares rose 0.5 percent to R2,889.99 as of 3:01 p.m. in Johannesburg, valuing the company at R1.27 trillion ($92bn). Rocket climbed as much as 7.9 percent to 22.275 euros in Frankfurt, a seven-month high, and was last trading at 21.57 euros.

Rocket Cash-In

Rocket, a Berlin-based startup factory, will retain a 13 percent shareholding in Delivery Hero and “continues to participate in a large way,” Chief Executive Officer Oliver Samwer said on a call with reporters. The company backed the food service’s successful June initial public offering in Frankfurt.

Delivery Hero competes with app-based takeout services including Just Eat Plc, GrubHub Inc. and Takeaway.com.

Rocket also reported improving group profitability and smaller second-quarter operating losses at key startups including Global Fashion Group. The successful IPO of Delivery Hero came as a boost after its other big investment, food-box startup HelloFresh, shelved listing plans in 2015.

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