Food delivery unicorn Line Man Wongnai is in talks to acquire Delivery Hero SE’s Foodpanda in Thailand as it plans for a stock-market debut in the next few years, according to people familiar with the discussions.
Bangkok-based Line Man Wongnai considered a deal at around US$100 million ($135.1 million) at one point, but the value is likely to have changed with the deterioration of the wider market and internal views toward loss-making businesses, said one of the people, who asked not to be named as the matter is private. The company is backed by Line Corp. and Singapore sovereign wealth fund GIC Pte.
No final decision has been made and talks could still fall through, the people said. Representatives for Line Man Wongnai and Line declined to comment. Representatives for Delivery Hero and Foodpanda didn’t immediately respond to requests for comment.
The potential takeover would bolster Line Man Wongnai’s pursuit of a spot among Thailand’s top online shopping platforms. Southeast Asia’s second-largest economy counts Line as its most popular messenger app. Tokyo-based Line merged with SoftBank Group Corp.’s Z Holdings Corp. in 2021 and is a major shareholder of Line Man Wongnai.
Line Man Wongnai was formed in 2020 from the merger of delivery service Line Man and Thai restaurant review platform Wongnai. Its valuation topped US$1 billion when it raised US$265 million this year. Grab Holdings Ltd. and Foodpanda are its biggest competitors in Thailand.
The move comes as Berlin-based Delivery Hero is seeking to accelerate a plan to reach profitability by 2023. Chief Executive Officer Niklas Oestberg suggested during a conference call a month ago that while his company has a strong position in countries such as Malaysia and the Philippines, it may exit in some markets where it’s not No. 1. “We are not looking to sell our Southeast Asia business, but there may be markets in Southeast Asia, or in other regions, where we are in discussions,” he said.
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That has triggered speculations whether ride-hailing and food delivery giant Grab may consider acquiring some assets. Grab’s chief financial officer, Peter Oey, said during an earnings call last month that Grab is focused on “organic growth” instead. “Cash preservation is critical for us,” he said in response to questions from analysts. “Our bar on M&A is extremely high.”
The biggest recent consolidation move in the sector came last week when Turkey’s Getir acquired Berlin-based Gorillas Technologies GmbH for US$1.2 billion.
