Delivery hero faces potential €400m fine, shares fall

Delivery Hero shares fell 17.4% in early trading on Monday after the company announced it faces a fine of more than 400 million euros ($433 million) from the European Commission over alleged antitrust violations.

The German online takeaway giant revealed the potential fine in a statement on Sunday evening. The Commission’s investigation is focused on accusations of “anti-competitive agreements to divide up national markets, exchange of commercially sensitive information and anti-poaching agreements,” according to Reuters.

Delivery Hero has said it intends to fully cooperate with the Commission’s investigation, a position it has maintained since the unannounced inspections in July 2022 and November 2023. To prepare for the potential financial impact, the company has announced it will significantly increase its existing reserves, which have been set at €186 million.

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

The fine is believed to be related to the sale of Delivery Hero’s Balkan business to Glovo in May 2021. Later that year, Delivery Hero acquired a majority stake in Glovo, further linking the two companies’ operations, Reuters notes.

When asked about the specific reasons behind the potential penalty, Delivery Hero referred to its official statement, but did not provide further details.

Source: Reuters