Delivery Hero Shares Climb After Exiting Crowded Germany Market

   By Ed Frankl 
 

Shares in Delivery Hero SE climbed on Wednesday after it said it would scale down its services in Germany and quit the Japanese market.

At 0945 GMT, shares were up 6.6% to EUR98.32.

Delivery Hero said it would exit six German cities, including Hamburg, Munich and Frankfurt, having entered the market this summer, and divest in foodpanda Japan, the local subsidiary it started in September 2020.

"These decisions allow Delivery Hero to shift its resources to highly attractive growth opportunities in other markets and new verticals, especially in quick commerce, that are expected to generate more value for the ecosystem and shareholders," the company said in a statement.

Delivery Hero blamed an increased number of players in Germany and a shortage of riders that meant "a new reality" emerged in the country toward the end of 2021. An innovation hub will remain in Berlin.

Shares in its rival Just Eat Takeaway.com NV, currently by far the top food-delivery service in Germany, also rose on Wednesday morning, up 4.3% to EUR49.27.

Delivery Hero's move "underlines our view that it is extremely difficult to break into a market where there is already a dominant No.1 operator," ING analysts said.

"It will provide comfort that Just Eat Takeaway's key profit pool Germany is not at risk despite several players having recently entered the market," ING added.

Uber Eats and DoorDash have also made forays into the German market in recent months, but have struggled to eat into Amsterdam-based Just Eat Takeaway's market share.

Germany has also tightened restrictions in the post-Christmas period, introducing strict rules on large events and banning meetings of more than 10 people, all of whom must be vaccinated or recovered from the coronavirus, over fears of the Omicron variant.

Write to Ed Frankl at [e-mail]; @Ed_Frankl

(END) Dow Jones Newswires

December 22, 2021 05:07 ET (10:07 GMT)

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