(Bloomberg)—Naspers Ltd. agreed to pay 660 million euros ($775 million) to boost its stake in Germany’s Delivery Hero AG as Africa’s biggest company increases its exposure to the online food-delivery market.
The Cape Town-based media and technology business will buy stock from Rocket Internet SE at 29.50 euros a share, it said in a statement on Thursday. That’s a discount of 12% based on Wednesday’s closing price, making the South African company the biggest investor with a 24% holding.
“The increasing portion of consumer spend that the segment attracts represents an attractive growth opportunity for us,” Meloy Horn, a spokeswoman for Naspers said in an emailed response to questions. The business model has “attractive financial returns and untapped potential in geographies that are familiar to Naspers, all combine to make it a strong investment proposition.”
The deal strengthens Naspers’s position in internet food delivery, with Delivery Hero sitting alongside iFood in Brazil, Swiggy of India and Mr Delivery in South Africa in the company’s portfolio. Naspers has become one of the world’s largest investors in e-commerce ventures as it tries to build on the success of its early stage investment in Chinese technology giant Tencent Holdings Ltd., which is now worth about $136 billion. It’s also Africa’s largest pay-TV provider.
Reinforcing value
“It’s another company in the developing world portfolio and reinforces the value sitting in Naspers,” Michael Treherne, a money manager at Johannesburg-based Vestact, said by phone. Delivery Hero is the food delivery market leader in 36 of 42 markets around the world.
The company is seeing potential for growth across a broad range of the regions, Horn said. “Significant growth has already occurred in Western Europe and North America, but Asia, Latin America, and the Middle East, among other markets that Naspers operates in, are at the beginning of the growth cycle,” she said.
Rocket, a Berlin-based startup factory and No, 330 in the Internet Retailer 2017 Global 1000, will retain a 13% shareholding in Delivery Hero and “continues to participate in a large way,” CEO Oliver Samwer said on a call with reporters. The company backed the food service’s successful June initial public offering in Frankfurt.
Delivery Hero competes with app-based takeout services including Just Eat Plc, GrubHub Inc. and Takeaway.com.
Rocket also reported improving group profitability and smaller second-quarter operating losses at key startups including Global Fashion Group. The successful IPO of Delivery Hero came as a boost after its other big investment, food-box startup HelloFresh, shelved listing plans in 2015.
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