Glovo Acquisition: Key Details, Impact, and What Comes Next

Delivery Hero's acquisition of Glovo marks a significant milestone in the food delivery industry. By securing a majority stake, Delivery Hero aims to enhance its global footprint and operational capabilities. This strategic move is set to serve up to 2.2 billion people across 74 countries, positioning Delivery Hero as a dominant player in the market.

What Is Glovo?

Founded in 2015, Glovo is a versatile delivery service offering food, groceries, pharmacy items, and various other products. Its unique selling points include rapid delivery times, a broad range of services, and a significant global presence across Europe, Africa, and Asia. Glovo also provides real-time order tracking through its app, ensuring transparency and convenience for users. Additionally, it offers flexible work opportunities for riders and growth potential for business partners.

Who Acquired Glovo?

Delivery Hero is a global leader in the food delivery industry, operating in over 70 countries across four continents. The company connects customers with a wide range of restaurants and shops, and also operates small warehouses known as Dmarts for efficient delivery. Key services include food delivery and quick commerce, focusing on speed and convenience. With a Gross Merchandise Value of €11.3 billion in Q4 2023, Delivery Hero holds substantial market influence and extensive logistical capabilities.

When Was Glovo Acquired?

Delivery Hero completed its acquisition of Glovo on July 4, 2022. This move came amid a wave of consolidation in the food delivery industry, as companies sought to expand their market reach and operational capabilities. The acquisition, initially announced on December 31, 2021, allowed Delivery Hero to secure a majority stake in Glovo, enhancing its global footprint and aligning with industry trends of valuing companies on a fully diluted, debt-free basis.

Why Was Glovo Acquired?

• Market Expansion: The acquisition of Glovo significantly enhances Delivery Hero's global footprint. With Glovo's presence in over 1,300 cities across 25 countries, Delivery Hero can now serve up to 2.2 billion people in 74 countries. This strategic move consolidates Delivery Hero's market leadership in regions like Southern Europe, Central Asia, and Africa.
• Technology Integration: Delivery Hero stands to benefit from Glovo's advanced technological capabilities. Both companies share a vision of leveraging technology to improve operational efficiencies and service offerings. The integration allows for the exchange of knowledge and technological synergies, enhancing the overall platform's capabilities and benefiting millions of local businesses and couriers.
• Competitive Advantage: By acquiring Glovo, Delivery Hero strengthens its position against competitors like DoorDash and Deliveroo. The acquisition not only expands Delivery Hero's market presence but also enhances its operational scale. Glovo's multi-vertical approach, which includes services beyond food delivery, aligns with Delivery Hero's quick commerce strategy, providing a significant edge in the rapidly evolving e-commerce landscape.

Acquisition Terms

• Acquisition Price: The transaction values Glovo at €2.3 billion on a fully diluted, cash-free, and debt-free basis.
• Payment Method: Delivery Hero will acquire the Glovo shares through the issuance of approximately 7.9 million new Delivery Hero shares. In case of a significantly delayed closing, the consideration may be settled in cash, amounting to approximately €780 million based on the assumed share price.
• Key Conditions or Agreements:
  • Delivery Hero will become the majority shareholder, holding approximately 94% of shares on a non-diluted basis.
  • The transaction is subject to customary conditions and regulatory approvals, including merger control clearance in several countries.
  • Glovo will continue to operate under its existing brand and platform, with its current management team remaining in place.
  • Delivery Hero committed to providing back-stop financing of up to approximately €250 million to Glovo in several tranches in 2022.
  • The transaction documents include provisions for certain adjustments of the consideration in case of third-party transactions at a higher share valuation within 12 months after the closing date.

Impact on Glovo

The acquisition of Glovo by Delivery Hero has led to notable changes in operations and management. While Delivery Hero now holds approximately 94% of Glovo's shares, Glovo continues to operate under its existing brand and platform, with its current management team, including founders Oscar Pierre and Sacha Michaud, remaining in place. This continuity ensures that Glovo's operational strategies and company culture are preserved, while benefiting from Delivery Hero's extensive resources and expertise. The integration aims to leverage both companies' technological and operational strengths, enhancing service efficiency and expanding their global reach.

In terms of product offerings and services, the acquisition is expected to accelerate the growth and development of Glovo's multi-vertical approach, which includes food delivery, groceries, and pharmacy items. This strategic partnership allows both companies to enhance their service offerings, benefiting millions of local businesses and couriers. Employee reactions have been generally positive, particularly due to the conversion of Glovo's employee stock option program into Delivery Hero equity, providing significant financial benefits. Customer reactions, while not explicitly detailed, are anticipated to be favorable as the combined resources of both companies are likely to result in improved service quality and expanded delivery options.

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