Uber: Takeover of Delivery Hero Could Enhance Scale, but Price Matters Too

Key Morningstar Metrics for Uber Technologies

• Fair Value Estimate
  : $85.00
• Morningstar Rating
  : ★★★
• Morningstar Economic Moat Rating
  : Narrow
• Morningstar Uncertainty Rating
  : Very High

Delivery Hero confirmed that Uber Technologies UBER is interested in acquiring it after building a sizable stake over the past month. An offer of EUR 33 per share was rejected; shareholders are reportedly targeting closer to EUR 40 per share.

Why it matters: A takeover would let Uber capture scale-based efficiencies (data and algorithm sharing, eliminating research and development redundancies) and hedge its exposure to the United States, where DoorDash currently leads. The deal can make sense as the convenience economy consolidates, but pricing and synergies matter.

• Additional scale, indirect network effects, operating leverage, and Middle East/North Africa optionality are key justifications for the prospective acquisition. Uber has proved that more data improves network efficiency, keeping supply and demand engaged via a positive feedback loop. This acquisition could extend that loop geographically.
• Uber could build a network without Delivery Hero in many markets, but the proposed acquisition is likely attractive because eliminating a competitor should increase pricing power. At the same time, saying this outright would be unwise, as it invites antitrust concerns. Delivery Hero and Uber overlap in more than 20 markets.

Between the lines: Based on precedent transactions (DoorDash acquiring Deliveroo at an enterprise value of 13.5 times forward adjusted EBITDA and Prosus buying Just Eat Takeaway for 12.5 times) and public comparables, we think the rumored 15-16 times multiple makes sense, but Uber needs to show where it will capture synergies to justify the price.

The bottom line: We maintain our $85 fair value estimate for narrow-moat Uber, balancing potential margin enhancements from shared technology with integration costs and regulatory risks. As seen in DoorDash’s consolidation of the Dash, Deliveroo, and Wolt platforms, such integration can require a significant upfront investment.