Delivery Hero warns of drastically higher EU antitrust fine
2022 and 2023, European investigators paid a visit to Delivery Hero's headquarters. They accused the food delivery service of anticompetitive behavior, such as market partitioning. The fine could be significantly larger than previously anticipated.
Possible violations of EU antitrust law could cost Delivery Hero significantly more money than previously thought. The company could ultimately be fined over 400 million Euros, the company announced in the evening. Therefore, the board of directors decided to significantly increase the previously formed reserve of 186 million Euros. The decision was based on the latest informal exchange with the European Commission and a detailed analysis.
In this procedure, the allegation of anticompetitive behavior is at issue. According to the European Commission, Delivery Hero is said to have made agreements on market partitioning, the exchange of commercially sensitive information, and non-poaching agreements. The European Commission conducted searches at Delivery Hero and other industry companies in July 2022 and November 2023.
The company stated that it intends to fully cooperate with the European Commission, as it had already done during the unannounced searches in 2022 and 2023.
New CFO
Just a week ago, Delivery Hero announced an abrupt change in the company's finance department. Finance chief Emmanuel Thomassin will leave the board of directors with immediate effect and take on a new professional role outside the company, the food delivery service announced. From July 1, Marie-Anne Popp will take over the CFO position on an interim basis and report directly to CEO Niklas Östberg.
The MDax-listed company had raised its full-year targets at the end of April following a strong quarterly result. However, the failed sale of the loss-making Southeast Asia business of its daughter company Foodpanda had fueled speculation about a capital increase at Delivery Hero due to the need to refinance billion-dollar obligations in the coming years. Delivery Hero, however, expressed optimism in February that it would generate sufficient cash flow to service its debts. In addition, the company took on new loans to buy back some of its convertible bonds.
The ongoing antitrust investigation against Delivery Hero under EU law could lead to a fine exceeding 400 million Euros, as argued by the European Commission due to alleged market partitioning, information sharing, and non-poaching agreements. Delivery services like Delivery Hero play a significant role in the economy, and their adherence to antitrust laws is crucial to maintain fair competition.
