German delivery service Delivery Hero plans to take a majority stake in its Spanish rival Glovo, according to the Berlin-based company.
An agreement was signed with a number of Glovo shareholders to buy shares amounting to 39.4 per cent in exchange for its own shares, Delivery Hero said on Friday night.
"As a result of the transaction, Delivery Hero will become the majority shareholder of Glovo," the company said. The move will raise Delivery Hero's stake in Glovo to over 80 per cent.
The 7.9 million Delivery Hero shares offered in return would be worth approximately 780 million euros (886 million dollars) based on the closing price on December 30, 2021. The transaction would mean Glovo would be valued at 2.3 billion euros.
Completion of the acquisition is subject to regulatory approvals, including merger control clearance in several jurisdictions, the German company said, adding that this is expected in the second quarter of 2022.
Glovo chief executive Oscar Pierre welcomed the move. Delivery Hero chief executive Niklas Östberg said Glovo had played a pioneering role in the industry and held a leading market position in 16 out of 25 countries.
Founded in Barcelona in 2015, Glovo says it is present in more than 1,300 cities in 25 countries across Europe, Central Asia and Africa.
151 million in revenues
Glovo says it delivered 36 million orders and reported revenues of 151 million euros in the third quarter of 2021.
Delivery Hero has been involved in Glovo for several years.
Glovo does not only deliver food but also purchases from supermarkets or pharmacies.
Shortly before Christmas, Delivery Hero said it would soon discontinue its food delivery service Foodpanda in Germany.
The company had only restarted its Foodpanda delivery service in German cities again in May, after handing its Germany business to rivals some years earlier.