South Korea’s antitrust regulator announced on Monday, December 28, Delivery Hero must sell its South Korean subsidiary to win approval for a US$4 billion takeover of Woowa Brothers that would have given it a near monopoly in the country’s food delivery market.
The ruling from the Korea Fair Trade Commission (KFTC) is a setback for consolidation in the world’s third-largest online food delivery market, as competition heats up amid accelerated demand triggered by the coronavirus pandemic.
Berlin-based Delivery Hero agreed last year to buy Korea’s top food delivery app owner Woowa as it expands in Asia’s fast-growing but crowded market. For Woowa, the buyout is a lifeline in an intensely competitive market.
But the KFTC stated it would only approve the takeover if Delivery Hero sold its entire stake in its Korean unit, which owns the country’s No. 2 food delivery app Yogiyo.
KFTC stated the combined market share of the entity resulting from the takeover, if the unit was not sold, would be 97% of food delivery transactions as of July.
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