ISTANBUL (Reuters) -Turkish fast delivery company Getir completed its purchase of German rival Gorillas in a deal worth $1.2 billion that it said put it in a leading position in consolidation in the sector, the company said on Friday.
Serkan Borancili, who founded Istanbul-based Getir in 2015, shared the price tag on Twitter and said the combined company is now stronger.
The Financial Times, citing people familiar with the deal, said the purchase price is down from the $3 billion mooted in September last year, adding that it values the combined group at $10 billion.
Gorillas did not immediately respond to Reuters’ request for comment.
The FT also said job cuts were expected as part of the deal because of considerable overlap between the two companies’ network of small urban warehouses.
German grocery delivery app Gorillas, founded in 2020, has tripled the size of its business since last year when it raised 860 million euros ($907 million) but has not been profitable amid an uncertain economic outlook.
Gorillas said in June it expected to be profitable at a group level within 12 months. The company had previously said it would lay off 300 people, halving its administrative staff, as it shifted focus from rapid expansion to turning a profit.
Getir is also hoping to raise more funding early next year, the report said, adding the Turkish company was also cutting its own valuation by around a quarter.
Earlier this year, Getir closed a $768 million funding round led by Abu Dhabi state investor Mubadala that valued the company at around $12 billion.
The model for rapid grocery deliveries comes with high costs as the companies have to pay for thousands of riders and logistic centres across cities to get crisps, milk, pasta and other items to customers swiftly.
But competition has been fierce, and analysts are concerned growth will slow as pre-pandemic shopping habits return and consumers are squeezed by soaring inflation.
($1 = 0.9486 euros)
(Reporting by Ebru Tuncay in Istanbul and Mrinmay Dey in Bengaluru; Editing by Mark Potter, Jonathan Spicer and Louise Heavens)
