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Delivery Hero sells German business to Takeaway.com for €930M

Online food delivery provider Delivery Hero SE said Dec. 21 that it agreed to sell its entire German business to Dutch peer Takeaway.com NV for about €930 million in cash and stock.

Naspers Ltd.-backed Delivery Hero agreed Dec. 20 to sell its outstanding shares in Delivery Hero Germany GmbH and Foodora GmbH to Takeaway.com and one of its affiliates. The offer comprises €508 million in cash and 9.5 million shares in Takeaway.com, worth about €422 million, and will result in Delivery Hero becoming the owner of about 18% of Takeaway.com's share capital left after the latter issuing its equity stake to Delivery Hero, but before any potential share offering to fund the acquisition.

Takeaway.com has secured €680 million of committed bridge financing, Delivery Hero said.

The deal, which includes the Lieferheld, Pizza.de and Foodora brands in Germany, will also allow Delivery Hero to nominate an independent member to Takeaway.com's supervisory board.

Delivery Hero said the sale would strengthen its footprint in key global markets and raise its year-over-year growth in gross merchandise value for the nine months ending Sept. 30 to 42% from 38% and increase its cash position to about €1 billion from about €500 million as of Sept. 30.

The company plans to reinvest about half of the cash proceeds from the deal, which would have a net negative EBITDA impact of €250 million through 2019. Delivery Hero, which maintained its 2019 revenue outlook of between €1.08 billion and €1.15 billion, expects to garner incremental revenue of €45 million in 2019, and €81 million per year starting 2020.

Subject to approval at a Takeaway.com meeting scheduled for March 5, 2019, the deal is expected to close in the first half of 2019.

Morgan Stanley is the exclusive financial adviser to Delivery Hero, while Stibbe NV and Sullivan & Cromwell LLP are acting as legal advisers.