Delivery Hero Faces Potential €400 Million Fine, Shares Plummet

Shares in Delivery Hero tumbled by as much as 17.4% in early trading on Monday following the company’s announcement that it could face a fine exceeding €400 million ($433 million) from the European Commission due to alleged antitrust violations.

The German online food takeaway giant disclosed the potential fine in a statement released on Sunday evening. The Commission’s investigation centers on accusations of “anti-competitive agreements to share national markets, exchanges of commercially sensitive information, and no-poach agreements,” according to Reuters.

Delivery Hero has stated its intention to fully cooperate with the Commission’s investigation, a stance it has maintained since unannounced raids took place in July 2022 and November 2023. To prepare for the potential financial impact, the company announced it would significantly increase its existing provision, which had been set at €186 million.

Analysts at Jefferies have expressed concerns not about the financial burden of the fine itself but about the broader implications it could have for Delivery Hero’s business practices and reputation. In a note, Jefferies highlighted that the biggest challenge is “the fact pattern that it creates.”

The fine is believed to be related to the sale of Delivery Hero’s Balkans business to Glovo in May 2021. Later that year, Delivery Hero acquired a majority stake in Glovo, further intertwining the companies’ operations, as noted by Reuters.

When questioned about the specific reasons behind the potential fine, Delivery Hero referred back to its official statement without providing further details, to Reuters.

Source: Reuters