Insulated food bags branded with the logo of Foodpanda, a meal-delivery service operated by Delivery Hero, sit at the company’s operations center in Bangkok, Thailand, on Friday, March 16, 2018.
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German food delivery giant Delivery Hero announced it has ended negotiations with an undisclosed third party regarding the potential sale of its Foodpanda business in selected Southeast Asian markets, where it is attempting to downsize.
The company first confirmed it was in talks to sell business segments in Singapore, Malaysia, the Philippines, Thailand, Cambodia, Myanmar, and Laos in September, around the same time it embarked on another wave of layoffs in an effort to “streamline operations” and become “more agile.”
In a press release on Wednesday, Delivery Hero said the relevant parties failed to agree on the terms.
“The decision to terminate negotiations after months of discussions was taken after careful consideration,” said Niklas Östberg, CEO and co-founder of Delivery Hero.
In its latest statement, the company did not name any prospective buyers. However, German business outlet Wirtschaftswoche named its key competitor Grab as a potential buyer in a September report, attributing it to an unnamed source.
Just last week, Östberg said he was happy to hold onto the Foodpanda brand, after the German company’s share price plunged on reports that negotiations to sell the Southeast Asian units had collapsed.
“The strength of our APAC business has become evident during the last quarters as the region reached an inflection point in 2023,” Östberg said in the Wednesday statement. “We believe the region remains strongly positioned to drive profitable growth at scale.”
Delivery Hero’s business in Asia, its largest market, stagnated last year following the easing of Covid restrictions.
However, its revenue growth was flat for the final quarter compared to the previous year, with the company “now operating on break-even level” in the region, according to its fourth quarter 2023 trading update.
On Wednesday, Delivery Hero said it remains open to mergers and acquisitions and “will continue to assess potential alternatives” that can create value for shareholders “with high certainty of closing.”
The company said the latest move to end Foodpanda’s sale talks won’t affect its guidance reinstated in February.
Delivery Hero said in January it had sold about 4.5% stake in rival online food delivery group Deliveroo.