Line Man Wognai in Talks to Acquire Foodpanda

Unicorn food delivery service According to people familiar with the discussions, Man Wognai is in talks to acquire Foodpanda from Delivery Hero SE in Thailand as the company prepares to go public in the coming years.

At one point, Bangkok-based line man Wongnai was considering a deal worth around $100 million, but the value has likely changed due to deterioration in the broader market and internal views on loss-making companies, according to one of the people, who did not want to be identified because the matter is private. Line Corp. and the sovereign wealth fund GIC Pte own the company.

According to the sources, no final decision has been made and the talks could still fail. Line representatives and Line Man Wognai declined to comment. Representatives from Delivery Hero and Foodpanda did not immediately respond to requests for comment.

The potential acquisition would help Line Man Wognai's bid to become one of Thailand's top online shopping platforms. Line is one of the most popular messenger apps in Southeast Asia's second-largest economy. In 2021, Line merged with Z Holdings Corp., a subsidiary of SoftBank Group Corp. and a major shareholder in Line Man Wognai.

Line Man Wongnai was formed in 2020 from the merger of delivery service Line Man and Thai restaurant rating platform Wongnai. Its valuation surpassed $1 billion when it grossed $265 million that year. Grab Holdings Ltd. and Foodpanda are the biggest competitors in Thailand.

The move comes as Berlin-based Delivery Hero looks to accelerate a plan to reach profitability by 2023. Chief executive officer Niklas Oestberg hinted during a conference call a month ago that while his company has strong positions in countries like Malaysia and the Philippines, it could exit some markets where it’s not No. 1. “We don’t want to sell our business in Southeast Asia, but there might be markets in Southeast Asia or in other regions where we have discussions,” he said.

This has fueled speculation that Grab, the ride-hailing and food-delivery giant, may consider acquiring some assets. During a recent earnings call, Grab's chief financial officer, Peter Oey, stated that the company was instead focused on "organic growth." "Cash preservation is critical to us," he said in response to analyst questions. "Our M&A bar is extremely high."

The most recent industry consolidation occurred last week, when Turkish company Getir paid $1.2 billion for Berlin-based Gorillas Technologies GmbH.