FRANKFURT (Reuters) – German online takeaway food company Delivery Hero said on Wednesday it will have to take an impairment of up to 1.4 billion euros ($1.7 billion) on its takeover of South Korean food delivery app owner Woowa Brothers.
The transaction, which has just received regulatory clearance, was signed in December 2019. At the time Delivery Hero agreed to pay 1.7 billion euros in cash and 1.9 billion euros in shares based on a 20-day average share price of 47.47 euros.
Since then, Delivery Hero’s shares have risen by 162% and the value of the share consideration has appreciated accordingly.
Delivery Hero said that on Tuesday’s closing share price of 128.65 euros, the impairment could amount to up to 1.4 billion euros. The impairment is neither due to performance of Woowa’s operational business, nor cash relevant, it added.
In late December Delivery Hero agreed to sell South Korean food delivery app Yogiyo as part of the conditions for regulatory approval of the Woowa takeover. It received written clearance from the Korea Fair Trade Commission on Tuesday.
($1 = 0.8313 euros)
Reporting by Arno Schuetze; Editing by Jan Harvey