German food delivery group Delivery Hero has announced that it has signed an agreement to acquire a 39.4% stake in Spanish delivery app Glovo.
The company currently holds about 43.8% in Glovo shares on a non-diluted basis.
The transaction will value Glovo at €2.3 billion on a fully diluted and debt free basis before certain adjustments, the company said.
Commenting on the deal, Niklas Östberg, CEO and co-founder of Delivery Hero, said, "The Delivery Hero team has admired and supported Glovo for many years. They have been frontrunners in the industry by offering a multi-vertical service from the start.
"Their product focus and fast execution have given them a leading position in 16 out of 25 markets, despite having launched a number of years later than their peers. We will continue to invest in Glovo’s team and product, and see many opportunities to further enhance their operations with our resources and expertise."
Delivery Hero also committed to provide a back-stop financing of up to approximately €250 million to Glovo in several tranches in the course of 2020, the company added.
Glovo will continue operations with their existing brand and platform under their current management, it said.
'Strengthen Our Offering'
Oscar Pierre, CEO of Glovo, stated, "With the markets we cover today, we can serve a total population of more than 700 million people. I believe our potential is untapped, and I'm happy to have found a partner that matches our ambition, culture and will keep supporting this adventure we’ve embarked on to drive innovation further, strengthen our multi-category offering and create additional value for all our stakeholders, and the industry."
The closing of the transaction is subject to customary conditions and regulatory approvals, including merger control clearance in several countries, and is expected to occur in the second quarter of 2022, Glovo added.
In May of last year, Glovo ruled out merging with Delivery Hero citing intentions to go public in around three years.