Citi: Uber's Acquisition of Delivery Hero Could Unlock Up to €1.4 Billion in Cost Synergies
Taylor Wilson
Citi estimates a full Uber takeover of Delivery Hero could unlock up to €1.4 billion in cost synergies while adding South Korea, the Middle East, and Latin America to Uber's delivery map — a signal that Uber is evolving from ride-hail platform to global food-delivery infrastructure operator.
What is Uber actually buying?
Uber already holds roughly 37% of Delivery Hero and has offered €33 per share (about $38.29) for the remaining stock.
This means → Uber is not starting from scratch; it is topping up an existing large stake into full ownership.
Once closed, the deal would fold Delivery Hero's footprint — South Korea, the Middle East, Latin America — directly into Uber's network.
Where does the €1.4 billion in synergies come from?
Citi analyst Ronald Josey identifies three main buckets: cost of goods sold (COGS), marketing, and IT spending.
The bulk would come from Delivery Hero's projected ~€2.2 billion in administrative costs by 2027. In plain terms = merge the two companies' back offices and cut the overlap.
Josey flags IT as the largest upside: Delivery Hero spends roughly €500–600 million a year on IT, and Uber's global tech stack can absorb that workload without being rebuilt.
What are the risks?
Josey acknowledges operational integration risk — stitching together a multi-country delivery platform is complex.
He argues Uber can still run three tracks in parallel: autonomous-vehicle investment, delivery expansion, and capital returns.
This reflects Citi's core thesis: Uber's current cash flow and management bandwidth are wide enough to handle the acquisition without dragging down the core business.
Why is Citi calling a buy now?
Citi maintains a Buy rating, noting the stock has pulled back roughly 10% since Uber posted better-than-expected Q1 results and Q2 guidance.
Josey sees 50 million Uber One members, emerging-market expansion, and the autonomous-driving roadmap as durable growth engines.
This means → Citi's logic is "short-term pullback + unchanged long-term drivers = buying window."
Content is for reference only, not financial advice.