Delivery hero flags potential EU antitrust fine, shares fall

:Delivery Hero shares fell 17.4% in early trading on Monday, a day after the German online food company said the European Commission could fine it more than 400 million euros ($433 million) for violating antitrust rules.

The company’s shares trimmed some gains and were trading about 6 percent lower by 10:43 GMT.

The potential fine would be imposed for an “alleged anti-competitive agreement involving the allocation of domestic markets, the exchange of confidential commercial information and a non-takeover agreement,” the company said in a statement on Sunday evening.

Delivery Hero has announced that it will cooperate with the Commission’s investigation, as it did during unannounced raids in July 2022 and November 2023.

It added that it will also significantly increase the relevant reserve, which previously stood at EUR 186 million.

The company did not say when the potential fine might be imposed. A European Commission spokesman declined to comment.

Analysts at Jefferies said in a note that the biggest challenge for Delivery Hero is not the size of the fine or the company’s ability to pay it, but rather “the fact pattern it creates.”

Jefferies wrote that the fine could stem from the sale of Delivery Hero’s Balkan business to Glovo in May 2021, in which the German company built a majority stake later that year.

The delivery hero addressed his statement when asked about the specific reason for the potential punishment.

Sunday’s update is another example of European regulators’ investigation into Delivery Hero and Glovo.

In September 2022, Spain’s labor ministry fined Glovo for breaking a law requiring food delivery companies to formally employ their suppliers, while EU antitrust regulators raided both companies’ offices late last year as part of an expanded investigation into recruitment practices and information sharing.

(1 dollar = 0.9240 euros)