Delivery Hero Faces Breakup Pressure From Activist Investor

Delivery Hero’s years of global expansion are now under scrutiny. One of the company’s biggest investors is pushing the food delivery giant to sell assets and simplify its sprawling empire, arguing the current strategy has destroyed billions in shareholder value.

Delivery Hero is facing mounting pressure from one of its largest shareholders to accelerate a strategic overhaul that could include selling major parts of the business.

Hong Kong-based hedge fund Aspex Management, which holds about 9.2% of the German food delivery company, warned in a letter that it could push for leadership changes if the company fails to move quickly on a strategic review. The investor argued that Delivery Hero’s weak profitability and global sprawl had left the company badly exposed.

Shares in the Berlin-based group have fallen about 30% over the past year and now trade below €17, valuing the company at roughly €5 billion. At the peak of the pandemic-era tech boom in 2021, the stock traded above €130. That’s not a correction, that’s a crater.

Aspex wants management to accelerate the strategic review announced in December and consider selling businesses where it isn’t the strongest owner or operator, pointing specifically to operations across Asia, the Middle East and Latin America.

CEO Niklas Östberg said the company was evaluating strategic options with advisers at JPMorgan and that negotiations were ongoing. Management maintains the current share price doesn’t reflect operational progress, which is exactly what you say when the share price very much reflects operational progress.

The dispute arrives as Delivery Hero faces compounding external pressure. Competition from Uber, DoorDash, Grab and Meituan has intensified in key markets, and the company is also contending with a €329 million fine from the European Commission related to a food delivery cartel investigation.

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The dispute reflects a broader reckoning playing out across the global food delivery industry.

For years the sector pursued growth at almost any cost, racing into new countries, subsidizing orders with discounts and spending heavily on logistics networks in the hope that scale would eventually produce profits. Investors tolerated those losses during the era of ultra-low interest rates and pandemic-driven demand for home delivery, because the story was good enough that nobody needed the numbers to work just yet.

That era is over. Rising interest rates and tighter capital markets have forced investors to prioritize profitability and cash generation, and the companies that spent the last decade planting flags everywhere are now being asked to explain why.

Most competitors have already narrowed their geographic focus. Uber has exited several markets while doubling down on stronger regions. DoorDash remains concentrated in North America while expanding more selectively overseas. Delivery Hero went the other direction, expanding across roughly 70 countries through brands including Talabat, Glovo and Foodpanda.

That global footprint once looked like a strategic advantage. Today it looks more like a lease on 70 different problems. Running operations across that many jurisdictions brings regulatory exposure, legal risk and costs that compound faster than the revenue does. Aspex’s central argument is that the company’s structure has actively undermined profitability relative to its peers, and the stock chart makes it hard to disagree. A company that operates everywhere can easily end up dominating nowhere.

The strategic review is now management’s defining test.

Meaningful asset sales or a credible plan to concentrate on the company’s strongest markets could ease the pressure and give investors something to work with. But if the review drags on without concrete action, the confrontation with Aspex has every chance of escalating into a full governance battle, with leadership changes back on the table and the company negotiating from a weakening position. Östberg has the roadmap in front of him. The question is whether he moves fast enough to stay in the driver’s seat.

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