[DigitalToday reporter Daegeon Seok (석대건)] Germany's Delivery Hero (DH) has moved to sell Woowa Brothers, the operator of Baedal Minjok.

Industry sources said on Wednesday that DH has started the sale process for Woowa Brothers, 7 years after its acquisition. JPMorgan, the lead adviser, recently distributed a teaser letter containing an overview of the business, financial performance and investment appeal to major companies at home and abroad including Naver, Uber, Alibaba and DoorDash, as well as some domestic private equity funds.

DH is seeking a sale price of about 8 trillion won. That is about 12 times Woowa Brothers' average operating profit over the past 2 years. DH bought an 88 percent stake in Woowa Brothers in 2019 for 3.6 billion euros, or about 4.8 trillion won. A joint venture set up in Singapore by Delivery Hero and Woowa Brothers now holds a 99.98 percent stake.

DH's financial burden is cited as a reason for the sale. DH's debt stood at 6.17 billion euros, or about 9.25 trillion won, as of the end of last year, and its debt ratio is close to 231.2 percent. DH has continued efforts to secure liquidity, including selling Taiwan delivery platform Foodpanda to Singapore's Grab in March for $600 million, or about 900 billion won. Niklas Oestberg, DH's co-founder and chief executive officer, decided to step down in March next year, citing weak share performance and financial pressure.

Some analysts say there are significant hurdles before any deal is completed. The prevailing view in the industry is that DH's asking price is high relative to expected returns. Woowa Brothers' operating profit fell for a third straight year, to 699.8 billion won in 2023, 640.8 billion won in 2024 and 592.8 billion won in 2025. Profitability worsened as marketing costs rose amid intensifying competition with Coupang Eats.

Some people cite the possibility that Naver could form a consortium with Uber and join the bidding. They argue it could secure a food delivery business to keep Coupang in check. After the news, Naver shares at one point early in the session surged as high as 214,500 won, up 6.45 percent, reflecting expectations of an acquisition of Baemin. Naver's position is that it is not considering it.