German delivery app Delivery Hero has signed an agreement to acquire on-demand delivery start-up Glovo’s operations in Latin America in a deal valued at €230m.

The deal amount also includes a €60m performance-based earn-out.

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According to the agreement, Delivery Hero will acquire Glovo’s business in all Latin American countries, including Peru, Ecuador, Argentina, Panama, Costa Rica, Guatemala, Honduras and the Dominican Republic.

The company already has a footprint in Argentina, Panama and the Dominican Republic, and the newly acquired assets in these markets will be combined to its existing businesses at closing.

The company said that Glovo will continue to operate the business in these countries until March next year.

Delivery Hero CEO and co-founder Niklas Östberg said: “Latin America is a region with exceptional growth potential for online delivery.

“Acquiring Glovo’s local operations gives us the opportunity to double down on our efforts to drive innovation, continuously improve customer experience and support local vendors in the region. We have been working closely with Glovo for many years and are proud to incorporate their Latin American services into our global network.”

Glovo CEO Oscar Pierre added: “This deal will allow us to strengthen our presence in those markets where we are already very strong while also allowing us to invest in new markets where we see huge growth potential and opportunity. We truly believe that Delivery Hero is the best possible partner to take the business we have built in Latin America to the next level.”

Subject to closing conditions and regulatory approvals, the transaction is expected to close within the next few weeks.

Last month, Delivery Hero acquired a 100% stake in online grocery marketplace InstaShop in a deal valued at $360m.

Last year, the company agreed to acquire South Korean food delivery app operator Woowa Brothers for $4bn.