Delivery Hero fails in another buy as Saudi-based The Chefz mulls options

Saudi Arabia’s General Authority for Competition didn’t disclose any details or the reasons for its decision in a statement, but said Germany’s Delivery Hero sought to buy all of the Riyadh-based firm. The Chefz said, however, that talks are still ongoing.

The Chefz will now “leave the door open” for other options including an initial stock sale, though it’s still seeking another acquirer to buy the company, chief executive officer Abdulrahman Alshabanat said in an interview.

Negotiations with Delivery Hero started at the beginning of the year, he said, and chose Delivery Hero after receiving multiple offers that were higher.

“Our main goal of the acquisition wasn’t a financial one – instead we cared most about choosing the firm that had the right experience in the market,” he said, and chose Delivery Hero because it has a “global name” and the “know how”. “What I care about the most right now is growing the firm,” he added.

The Chefz latest investment round was held in 2019 with the backing of several Saudi-based venture capital players including Dammam-based Vision Ventures, he said, without disclosing any details on values.

Delivery Hero is coming up empty in its efforts to expand in the Middle East’s biggest economy by acquiring rivals, as deal talks earlier this year with Saudi e-commerce start-up Mrsool collapsed and ended in dispute. Elsewhere in the region, the Berlin-based food-delivery company has recently grown its footprint by buying Dubai grocery delivery platform InstaShop.

The Chefz, which started out as an app that specialised in home delivery for fine dining restaurants before expanding its services in the kingdom, competes against Delivery Hero’s Hungerstation and local firms like Jahez International Co. Delivery Hero’s regional operations also include Talabat and Yemeksepeti in Turkey. Delivery Hero didn’t immediately respond to requests for comment.