Shipping Hero doubles in Middle East with Saudi deal

Delivery Hero, the German online food delivery company, said on Friday that it is taking full ownership of its Saudi subsidiary in a deal worth $297 million.

The company said it has acquired the remaining 37% stake in HungerStation, which operates Delivery Hero in Saudi Arabia, in a deal that represents the Berlin-headquartered firm’s bid to expand its presence in the Middle East food delivery market.

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Delivery Hero shares were down 1.4% in afternoon trading.

“We believe in the vision, ambition and potential of the Kingdom of Saudi Arabia by 2030 and aim to contribute to its continued success through HungerStation,” said Niklas Ostberg, CEO and co-founder of Delivery Hero.

Delivery Hero is one of Europe’s largest food delivery companies, with a market value of $10 billion.

The firm faced problems in its home market of Germany, where it was forced to exit in December 2021 after losing out to the Netherlands’ Just Eat Takeaway.com.

Food delivery is a very competitive sector with many companies operating. This has led to the inevitable consolidation where different companies acquire competitors to achieve scale.

HungerStation connects more than 10,000 partners, including restaurants and grocery stores, with customers, Delivery Hero said in a statement on Friday.

The deal will help the firm build stronger ties with HungerStation and the rest of the company’s portfolio, Delivery Hero added.