Uber's Delivery Hero deal could strengthen cross-platform strategy

Uber Technologies Inc (NYSE:UBER, XETRA:UT8) 's planned acquisition of Delivery Hero (XETRA:DHER, OTCQX:DLVHF) could strengthen its cross-platform strategy and create additional opportunities to grow customer engagement, according to Jefferies, which highlighted the strategic benefits of the $14.8 billion transaction.

Jefferies wrote that the combination could increase the value of Uber One and expand cross-selling opportunities across additional delivery markets.

The analysts noted that the deal is expected to nearly double the number of markets where Uber offers both mobility and delivery services, increasing those markets from 34 to 58.

The acquisition is expected to add more than 35 million Delivery Hero (XETRA:DHER, OTCQX:DLVHF) users and more than 15 million Uber mobility users located in markets where both services are available.

Jefferies highlighted that customers using both Uber mobility and delivery products are more valuable to the company, generating three times more bookings and profits than single-product users.

The analysts also noted that cross-platform engagement can serve as a more efficient customer acquisition channel, with costs approximately 50% lower.

Jefferies wrote that Uber’s expected $1.2 billion in run-rate synergies by the end of 2027 should enhance the financial contribution of the deal.

The analysts noted that savings are expected to come primarily from deploying a common technology platform and reducing localized headcount outside Berlin.

The analysts also highlighted Uber’s expectation that the integration process will be relatively straightforward, as Delivery Hero will use existing Uber Eats technology rather tha...