Naver considers acquiring food delivery app Baemin from Germany's Delivery Hero

Naver, Korea’s largest portal site, is weighing an offer from German online delivery platform Delivery Hero to acquire Woowa Brothers, the operator of Korea’s leading food delivery app Baedal Minjok.

Multiple reports said on Tuesday that Naver is looking to acquire an 80 percent stake in Woowa Brothers. The operator’s total estimated value is at 8 trillion won ($5.3 billion).

“The company is reviewing various options to strengthen its business competitiveness, but no specific decisions have been made at this time,” Naver said in a regulatory filing Tuesday, adding that it would issue a follow-up disclosure within one month.

Delivery Hero has appointed JPMorgan Chase as the sales adviser for Woowa Brothers and recently distributed promotional materials to major domestic and overseas investors and private equity firms, including Naver.

Baedal Minjok, also known as Baemin, is one of Korea’s major food delivery apps with a robust user base. Baemin leads the domestic market with 23.41 million monthly active users as of April, according to market tracker Mobile Index, followed by Coupang Eats with 13.15 million and Yogiyo with 4.21 million.

Delivery Hero acquired an 87 percent stake in Woowa Brothers for about $4 billion in 2019 and the operator has since been a steady cash cow, growing exponentially during the Covid-19 pandemic. The German company is now looking to sell, however, as its financial burdens have mounted amid rising global interest rates and a slowdown across the platform industry.

In a shareholder letter last year, Delivery Hero said it was conducting a strategic review of its portfolio, capital allocation and cost structure, adding that the review includes potential asset disposals and partnerships.

Local competition is also intensifying. Although Baemin remains the market leader, rivals such as Coupang Eats are rapidly gaining ground, luring users with free delivery offers and membership perks.

Delivery Hero disclosed on Monday that Uber holds a 19.5 percent stake in the German company, with an additional 5.6 percent in options. 

BY LEE JAE-LIM [[email protected]]