Uber CEO Dara Khosrowshahi Spills Delivery Hero Deal’s ‘Secret Sauce’ – It Lets Us Move Mobility Users To Delivery ‘Back And Forth'

• Khosrowshahi also said that users who use both platforms spend three times as much as those who use a single platform.
• Khosrowshahi also touted the strength of the various sub-brands that Delivery Hero operates across markets, saying that Uber will power them using its technology, which it has invested billions of dollars in so far.
• Khosrowshahi believes that Delivery Hero’s sub-brands are strong and added that the cross-selling of mobility and delivery offerings will create “compelling value.”

Uber Technologies Inc. (UBER) CEO Dara Khosrowshahi on Wednesday laid out the investment case behind the company's proposed $14.8 billion acquisition of Delivery Hero

During an interview with CNBC, Khosrowshahi said the deal expands the number of markets in which Uber can combine its mobility and delivery businesses, a strategy he called the company's "secret sauce."

“It increases by almost 50% the number of markets in which we operate both mobility and delivery together. That is our secret sauce… the power of the platform. It allows us to move mobility users to delivery, and back and forth,” he said.

Uber shares were up nearly 1% in Thursday’s pre-market trade.

Khosrowshahi Touts 3X Spends From Users Of The Two Platforms

Khosrowshahi also said that users who use the two platforms together spend three times as much as those who use a single product.

“That’s a unique advantage we’ve got competitively, and Delivery Hero allows us to extend the number of markets in which we operate together,” he added.

Khosrowshahi also touted the strength of the various sub-brands that Delivery Hero operates across markets, saying that Uber will power them using its technology, which it has invested billions of dollars in so far.

“That will allow us to bring in billions of dollars in synergy. The effective price that we’re paying for the assets [of Delivery Hero], with synergies, after close, is only eight times the earnings before interest, taxes, depreciation, and amortization (EBITDA),” he said.

Khosrowshahi believes that Delivery Hero’s sub-brands are strong and added that the cross-selling of mobility and delivery offerings will create “compelling value.”

Khosrowshahi Says Delivery Hero’s Positions Are ‘Priceless’

Khosrowshahi acknowledged that the positions that Delivery Hero has built in the markets it operates in are “priceless,” while 

“At this point, it will be impossible for a player to start fresh and to build that kind of asset, which is why the asset was quite compelling for us,” he added.

The Uber CEO also said that for Uber, organic and inorganic growth opportunities are not mutually exclusive, while emphasizing that the company has to be innovative enough to continue growing organically.

“Acquisitions will be a part of our capital allocation strategy. We’re going to keep buying back stock. We’re going to keep investing in autonomous as well, which is an incredibly promising technology,” he added.

UBER’s Delivery Hero Transaction Detailed

Uber announced on Thursday that under the proposed deal, it will pay €41.50 per share for Delivery Hero, valuing the company at $14.8 billion, or $13.7 billion after accounting for its existing stake.

The acquisition would expand Uber's mobility and delivery platform to 99 markets worldwide, with combined pro forma 2025 Gross Bookings of $236 billion.

To help address regulatory concerns, Delivery Hero separately agreed to sell businesses across 14 overlapping markets to investment firm SSW Partners for about $1.6 billion. Uber will acquire Delivery Hero operations spanning 50 markets, nearly doubling the number of countries where it offers both mobility and delivery services from 34 to 58.

Uber said the transaction is expected to be accretive to non-GAAP earnings per share immediately after closing and deliver high-single-digit percentage EPS accretion by the third year.

The company also pledged to keep Delivery Hero's Berlin headquarters and workforce intact through at least 2029, while committing to invest €2 billion in Germany over the next five years, including autonomous vehicle deployments and partnerships with the country's automotive industry.

UBER stock is down 11% year-to-date and 21% over the past 12 months. The S&P 500 ETF Trust (SPY) is up 21% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 29%.

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