SINGAPORE: Delivery Hero, Foodpanda’s parent company, has said that negotiations for its sale with Grab in certain markets in Southeast Asia are still ongoing, contrary to rumours that talks have collapsed.
Business Today, a Malaysian news outlet, reported on Friday (Feb 2) that Grab’s attempt to buy foodpanda had failed “reportedly due to a pricing dispute.”
It quoted individuals familiar with the matter that Grab perceived the asking price from Delivery Hero, which is based in Germany, to be “‘too high’ especially considering its current strategic focus on achieving profitability.”
Business Today added that the failure of the talks to proceed meant a strategic shift for Grab, causing the firm to swerve toward efforts to improving ride-sharing services in Singapore, its home market.
“The decision reflected Grab’s commitment to achieving financial sustainability amid the evolving landscape of the ride-hailing and food delivery industry,” BT added.
Delivery Hero issued a statement on Feb 2, however, debunked the news, saying, “There are market rumours that the negotiations for the potential sale have collapsed. We confirm that the negotiations for the potential sale are ongoing, and, thus, the rumours are false.”
Bloomberg, which reported on the issue, said that a representative from Grab has declined to comment on the issue.
In its largest intra-day decline in two years, shares of Delivery Hero went down by 9 per cent on Feb 2, reaching €19.56 (S$28.39) at 1:27 pm in Frankfurt.
Delivery Hero’s sales in Asia have gone down since pandemic lockdowns were eased. The company announced in September that it was in the midst of negotiating for the sale of foodpanda in South East Asia, including markets in Singapore, Malaysia, Philippines and Thailand.
“Our company priority right now is to become leaner, more efficient and even more agile. To do this, we need to streamline our operations so we can take on a more structured approach for the coming days,” the APAC CEO of Foodpanda shared in a letter to the company’s employees.
Foodpanda carried out layoffs on Sept 22, 2023.
In the same month, German media reported that Grab was a potential buyer.
“Grab’s competitors whether Gojek or Foodpanda are losing market share. Grab is gaining market share in deliveries from Foodpanda who might even exit few markets in due course. Foodpanda is disadvantaged due to its stand-alone delivery model,” noted Sachin Mittal, the head of telecom, media, and technology research at DBS Bank at the time.
Bloomberg noted in November that Chinese shopping platform Meituan is looking into a possible acquisition of Foodpanda in those markets. /TISG
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