Delivery Hero doubles down on Middle East with Saudi deal

German online food delivery company Delivery Hero said on Friday it will take full ownership of its Saudi subsidiary in a deal worth $297 million.

The company said it had bought the remaining 37 percent of HungerStation, which operates Delivery Hero in Saudi Arabia, in a deal that represents the Berlin-based company’s efforts to expand its presence in the Middle East’s food delivery market.

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Shares of Delivery Hero were down 1.4% in afternoon trading.

“We believe in the vision, ambition and potential of the Kingdom of Saudi Arabia for 2030 and are committed to contributing to its continued success through HungerStation,” Delivery Hero CEO and co-founder Niklas Östberg said in a statement.

Delivery Hero is one of the largest food delivery companies in Europe with a market cap of $10 billion.

The company ran into trouble in its home market of Germany and was forced to withdraw in December 2021 after losing out to Just Eat Takeaway.com in the Netherlands.

Food delivery is a highly competitive industry with several companies operating in the field. This led to inevitable consolidation, with various companies acquiring competitors to achieve scale.

HungerStation connects more than 10,000 partners, including restaurants and grocery stores, with customers, Delivery Hero said in a statement Friday.

Delivery Hero added that the deal will help the company develop stronger ties to HungerStation as well as the rest of the company’s product portfolio.