Grab reportedly in talks to grab Foodpanda's business in Asia

Delivery Hero, the Berlin-based parent company of Foodpanda, has confirmed ongoing discussions about a partial sale of its Asian operations. Singapore's tech giant, Grab, is reportedly the front-runner in this potential acquisition. While the exact value of the deal remains undisclosed, market insiders speculate that the transaction could exceed 1 billion euros for the Foodpanda brand across several Southeast Asian nations.

Following this revelation, shares of the online takeaway food company soared, registering a significant 13.5% increase, reflecting the market's positive reception of the news.

The proposed sale would encompass the Foodpanda brand in seven countries: Singapore, Malaysia, Philippines, Thailand, Cambodia, Myanmar, and Laos. However, both companies have emphasised that these discussions are preliminary, and there's no guarantee of a conclusive deal.

If this acquisition materialises, it would solidify Grab's dominance in the Southeast Asian food delivery sector. Currently, Grab holds a commanding 50% or more of the market share, with Foodpanda being its primary competitor, holding between 30 to 40% depending on the country. This move could potentially position Grab as the undisputed 'Google of food deliveries' in the region.

Despite its significant market presence, Delivery Hero has struggled financially since its listing on the German stock exchange in 2017. The company has yet to turn a profit and is reportedly seeking avenues for capital amidst a challenging global financial climate characterised by high interest rates and bearish stock market sentiments.

Conversely, Grab, while also not yet profitable, boasts a robust financial position with approximately S$6.7 billion in cash and liquid investments. The company, listed on the New York Stock Exchange, reported a revenue of US$567 million for the quarter ending June 30. Predominantly driven by its food delivery segment, Grab has also witnessed substantial growth in its ride-sharing operations across Southeast Asia and anticipates breaking even on an adjusted core earnings basis in the forthcoming quarter.