Delivery Hero, a Germany-based food takeaway company will buy Foodpanda, its rival food delivery company. The value of the acquisition deal has not been disclosed.
After its last round of funding in 2015, Delivery Hero was valued at $3.05 billion. In a statement, the company said it has agreed to buy Foodpanda. This buyout is to further consolidate the positon of the company in Europe's fierce food-delivery marketplace.
Both —Foodpanda and Delivery Hero —are together backed by German e-commerce firm Rocket Internet. Apart from 49.1 percent stake in Foodpanda (which remains focussed in the regions of Eastern Europe, the Middle East and Asia), Rocket Internet also invested 800 million euros in Delivery Hero last year.
The acquisition will receive funding by the mode of issuing new shares and major shareholder Rocket Internet would increase its stake to 37.7 percent. However, Foodpanda has been struggling with sales in India and other Asian countries. It also had to shut down its operations in Indonesia.
"The transaction strengthens Delivery Hero's global leadership position in online food ordering and delivery, with the combined group processing over 20 million orders per month across 47 countries," the statement added.
The acquisition would help expand Delivery Hero's footprint in other international markets.
"The combination of foodpanda and Delivery Hero, one of our most important companies, further consolidates key markets resulting in significantly improved market positions," Rocket Internet's CEO Oliver Samwer said in the statement.
Last year, foodpanda expanded into 20 more countries and launched a mobile app for iOS and Android.