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Corporate watchdog chief to take 'balanced approach' to Delivery Hero's acquisition of Woowa

All News 10:48 December 20, 2019

SEJONG, Dec. 20 (Yonhap) -- South Korea's corporate watchdog chief has said her agency will take a "balanced approach" when it evaluates a US$4-billion deal by Germany's Delivery Hero to acquire the nation's largest food delivery app operator, Woowa Brothers.

Last week, the German firm, which also has the second-biggest delivery player, Yogiyo, in South Korea under its wing, said it will acquire an 87-percent stake in Woowa, the operator of delivery app Baedal Minjok, or Baemin, from existing investors, such as Goldman Sachs and Singaporean fund GIC.

The deal, which is the biggest global acquisition for a food delivery app, is subject to approval from South Korea's Fair Trade Commission (FTC).

Joh Sung-wook, chairperson of the FTC, told reporters on Thursday that the regulator "will take a balanced approach (to the deal) by making a comparison between negative impacts on consumer welfare and promotion of innovation."

Joh Sung-wook, chairperson of the FTC, speaks at a press conference on Dec. 19, 2019. (Yonhap)

Joh Sung-wook, chairperson of the FTC, speaks at a press conference on Dec. 19, 2019. (Yonhap)

The FTC is set to look into whether the deal could restrict competition and result in price hikes and price-fixing, a process that could take at least 120 days.

Founded in 2010 as a food delivery company, Woowa Brothers quickly became the country's top online food delivery services firm, enjoying over 10 million active monthly users in a country with a population of 51 million. Woowa Brothers' Baemin accounted for up to 60 percent of the market.

But the combined users of Yogiyo and Baedaltong will account for 98.7 percent of all users of food delivery-related apps in Asia's fourth-largest economy, triggering concerns that the megadeal would hamper competition in the fast-growing market.

South Korea's food delivery app market reached 10 trillion won ($8.6 billion) last year.

Woowa Brothers and Delivery Hero signed a partnership to establish a joint venture, named Woowa DH Asia and to be based in Singapore, to tap into the burgeoning food delivery market in the region.


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