Delivery Hero flags potential EU antitrust fine, shares slide

FILE PHOTO: The Delivery Hero's logo is pictured at its headquarters in Berlin

By Paolo Laudani

(Reuters) -Shares in Delivery Hero fell as much as 17.4% in early trading on Monday, a day after the German online food takeaway firm said the European Commission might fine it more than 400 million euros ($433 million) due to antitrust violations.

The shares pared some gains to trade around 6% lower by 1043 GMT.

The potential fine would be for "alleged anti-competitive agreement to share national markets, exchanges of commercially sensitive information and no-poach agreements", the company said in a statement on Sunday evening.

Delivery Hero said it would cooperate with the Commission's investigation, like it did during unannounced raids in July 2022 and November 2023.

It will also significantly increase its corresponding provision, which it had previously built up to 186 million euros, it added.

The company did not say when the potential fine might be imposed. A spokesperson for the European Commission declined to comment.

Analysts at Jefferies said in a note that the biggest challenge for Delivery Hero is neither the materiality of the fine nor its ability to pay it, but rather "the fact pattern that it creates".

Jefferies wrote that the fine might stem from the sale of Delivery Hero's Balkans business to Glovo in May 2021, a company in which the German firm built a majority stake later that year.

Delivery hero referred to its statement when asked about the specific reason for the potential fine.

Sunday's update was the latest example of European regulators probing Delivery Hero and Glovo.

In September 2022, Spain's labour ministry fined Glovo for violating a law requiring food delivery firms to formally hire their riders, while EU antitrust regulators raided both companies' headquarters late last year as part of an expanded investigation into hiring practices and information sharing.

($1 = 0.9240 euros)

(Reporting by Paolo Laudani in Gdansk; editing by Milla Nissi)