Getir buys grocery app rival Gorillas in $1.2 billion deal - FT

© Reuters. FILE PHOTO: A courier of the fast grocery deliverer Getir rides a bike as Amsterdam and Rotterdam have moved to ban new "dark store" delivery hubs in the city centres, in Amsterdam, Netherlands February 8, 2022. REUTERS/Piroschka van de Wouw/File Photo

(Reuters) - Turkish fast delivery company Getir has closed its acquisition of German rival Gorillas in a deal that values the combined group at $10 billion, the Financial Times reported on Friday.

The deal values Gorillas at around $1.2 billion, down from the $3 billion mooted in September last year, the report added, citing people familiar with the matter.

Getir and 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)