Delivery Hero ends talks to sell Foodpanda in Southeast Asia

German food delivery giant Delivery Hero said it has ended talks with an undisclosed third party over the potential sale of its Foodpanda business in select Southeast Asian markets, where it is trying to downsize.

The company first confirmed that it is in talks to sell business segments in Singapore, Malaysia, the Philippines, Thailand, Cambodia, Myanmar and Laos in Septemberaround the same time, a new wave of layoffs began in an effort to “streamline operations” and become “more agile.”

IN press release on Wednesday, Delivery Hero said the parties involved had not been able to agree on terms.

“The decision to end negotiations after months of discussions was made after careful consideration,” said Niklas Astberg, CEO and co-founder of Delivery Hero.

In its latest statement, the company did not name potential buyers. However, German Business Center Wirtschaftswoche identify your key competitor Grab it as a potential buyer in a September report, attributing it to an unnamed source.

Just last week, Östberg said he was happy to keep the Foodpanda brand after the German company’s share price collapsed on reports that talks to sell the Southeast Asian units had broken down.

“The strength of our APAC business has become evident in recent quarters as the region reaches an inflection point in 2023,” Östberg said in Wednesday’s statement. “We believe the region remains strongly positioned to drive profitable growth at scale.”

Delivery Hero’s business in Asia, its biggest market, stagnated last year after the easing of Covid restrictions.

However, its revenue growth was flat for the latest quarter compared to a year earlier, with the company “now operating at a break-even level” in the region, according to its Q4 2023 Trading Update.Ya

On Wednesday, Delivery Hero said it remains open to mergers and acquisitions and will “continue to evaluate potential alternatives” that can create value for shareholders “with a high certainty of completion.”

The company said the latest move to end talks to sell Foodpanda would not affect its guidance, which was reinstated in February.

Shipping Hero said in January it sold about a 4.5% stake in rival online food delivery group Deliveroo.