Talabat fully acquires Instashop from parent company Delivery Hero for USD 32 mn

Talabat fully acquires Instashop from parent company Delivery Hero for USD 32 mn, according to what Enterprise published. 

Talabat, listed on the Dubai Financial Market (DFM), has acquired 100% of the Dubai-based online grocery delivery platform, Instashop, in a USD 32 million related-party transaction. The seller is Delivery Hero, Talabat’s Berlin-based parent company and majority shareholder. This acquisition is part of a strategic restructuring initiative aimed at enhancing operational efficiencies within Talabat's grocery and retail sectors. Instashop will continue to operate under its own brand within Talabat's organizational structure.

The transaction was financed entirely through Talabat’s internal reserves, indicating a strategic use of company resources. The acquisition cost is based on Instashop's capital amount rather than its market value. Previously, Instashop was valued at USD 360 million in 2020 when Delivery Hero purchased it. The acquisition terms included USD 270 million paid upfront with additional payments contingent on Instashop’s future performance. Instashop currently operates in the UAE and Egypt, contributing positively to Talabat’s regional footprint.

Talabat’s recent IPO in December saw a 20% stake listed on the DFM, raising USD 2 billion, which underscores the company's robust financial position and strategic growth ambitions.

The acquisition is expected to create significant operational and technological synergies, particularly in streamlining delivery and product operations. This integration process is actively underway and aims to optimize the combined capabilities of Talabat and Instashop.

Financially, the acquisition has positioned Talabat’s gross merchandise value (GMV) at USD 2.5 billion for 2024 on a pro forma basis. Instashop's contribution to this figure was notable with its GMV increasing by 16% year-over-year to USD 631 million in the last year, which represents about 8% of Talabat's total GMV for 2024. This performance is also reflected in Instashop's positive and improving EBITDA margins.

Despite these promising developments, Talabat’s stock experienced a slight decline of 0.7%, closing at AED 1.53 on Thursday following the announcement. This market reaction may reflect initial investor caution as they assess the long-term benefits of the acquisition against the immediate financial outlay and ongoing integration efforts.