Ride-hailing giant Uber (UBER) is set to boost its stake in German food delivery platform Delivery Hero (DLVHF), even as it races to “shake things up” in Europe, where U.S. rival DoorDash (DASH) has been aggressively expanding. UBER stock rose over 1% early Friday following the news.
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Uber to Raise Stake in Delivery Hero
On Friday, Dutch tech investor Prosus (PROSF) announced that it has agreed to sell 13.58 million shares, or 4.5% of its stake in Delivery Hero, to Uber. The deal is worth about €20.00 per share, or roughly €270 million ($318 million).
Prosus’ reduction of its stake in the Berlin-based food delivery platform is part of efforts to fulfill conditions upon which European regulators in August last year approved its takeover of Dutch online food delivery platform Just Eat Takeaway (JTKWY).
Uber Expands European Footprint
However, for Uber, the deal comes as the company has continued to expand the presence of its Uber Eats food delivery business in Europe. In February, the California-based company launched in seven new markets on the continent, including Austria, Denmark, and Finland.
Uber said it was aiming to generate an additional $1 billion in gross bookings over the next three years from the expansion. Susan Anderson also told the media the company was looking to “raise the bar, shake things up, and deliver better value across the category”.
The moves by Uber turn up the heat on rival DoorDash, which has significantly grown its market share in Europe through its 2022 acquisition of Finnish delivery platform Wolt and the recent $3.9 billion takeover of British counterpart Deliveroo.
Moreover, DoorDash recently scaled down its operations in Asia to focus its investments on markets where it sees “the clearest path to sustainable scale and long-term leadership.”
Is Uber a Buy, Hold, or Sell?
On Wall Street, Uber’s shares continue to enjoy a Strong Buy consensus rating from analysts based on 26 Buys and two Holds issued over the past three months.
In addition, the average UBER price target of $106.24 implies roughly 39% upside from current trading levels.
