It seems like Grab is getting rather, well… grabby.
On 21 September 2023, Grab had been taking steps to realise its ambitious decision to buy its long-time rival and fellow food delivery company, foodpanda.
At that time, it had been in advanced talks with Delivery Hero, the Berlin-based parent company of foodpanda, to purchase activities under the foodpanda brand spanning across Singapore, Cambodia, Laos, Malaysia, Myanmar, the Philippines and Thailand.
The total cost of the deal involving the sale of operations in all seven countries remains undisclosed, but is estimated to exceed 1 billion euros (S$1.46 billion).
Grab Set to Acquire Malaysia’s foodpanda Business in December 2023
Now, it seems like the acquisition of foodpanda in Malaysia is set to occur some time next month, which was much faster than what was initially expected.
According to Malaysia’s New Straits Times, Grab and Delivery Hero’s deal regarding the purchase of foodpanda’s operations in Malaysia is set to reach completion by December this year.
The decision may be a timely one for Delivery Hero, as business in foodpanda is not looking so hot. While foodpanda is the second largest online food delivery company in South East Asia, it has been seeing continued losses in the past year.
According to Delivery Hero’s financial report in the first half of 2023 (1H23), the revenue from its operations in Asia (which includes Bangladesh, Cambodia, Hong Kong, Laos, Malaysia, Myanmar, Pakistan, the Philippines, Singapore, Taiwan and Thailand) has fallen from 1.87 billion euro from 1.84 billion euro.
In its annual report for the financial year ended 31 December 2022, Delivery Hero Malaysia Sdn Bhd, which is responsible for foodpanda operations in Malaysia, also posted a net loss of 52.22 million euro.
However, it seems that foodpanda staff in Malaysia are still kept in the dark on the potential sale, although some have started bracing for the worst and have begun searching for new jobs. According to New Straits Times, foodpanda Malaysia also said it had nothing new to share on the matter.
For those curious for a summary of the projected deal, watch this short video to find out:
Not the First Time Grab Has Announced Such An Ambitious Deal
So, what does Grab stand to gain from this particularly costly purchase?
Currently, Grab is also facing a slowdown in growth. Ever since it made its debut on the Nasdaq stock exchange on 2 December 2021, Grab’s share price has dropped 11.27%.
However, if the acquisition of foodpanda is successful, Grab would stand to benefit from an increased market share in the food delivery industry, with its share price slated to increase after the purchase.
Apart from sinking its teeth deeper into the online food delivery industry, Grab has also made another massive deal in the ride-hailing world.
As the third largest taxi operator in Singapore, Grab struck a deal to acquire Trans-Cab to expand its fleet of taxis and its repertoire of drivers in order to maximise profits.