Korea’s antitrust regulator has begun a preliminary review of Uber’s proposed acquisition of Delivery Hero, which controls food delivery leader Baemin.
An Uber Eats delivery bag is seen in an undated file photo.REUTERS/YONHAP
Korea’s antitrust regulator began a preliminary review of Uber’s proposed acquisition of Baemin, the country’s largest food delivery platform, the Fair Trade Commission (FTC) said Tuesday.
The FTC received a request from Uber Technologies to acquire Germany’s Delivery Hero through a tender offer for all outstanding shares. Delivery Hero indirectly controls Woowa Brothers, the operator of Baemin, which is also known as Baedal Minjok.
A successful takeover would mark the world’s largest ride-hailing platform’s return to Korea’s food delivery market after eight years. It would also leave Uber operating two platforms in Korea: ride-hailing service Uber Taxi and food delivery app Baemin.
An ongoing preliminary review allows companies to ask the FTC whether a planned merger or acquisition could harm competition before formally filing the deal. If the transaction clears the preliminary review, the subsequent formal filing can be processed relatively quickly through a simplified review.
The FTC considers the deal a conglomerate merger because it combines Uber’s ride-hailing platform with Delivery Hero’s food delivery business.
The regulator plans to examine the competitive landscape of Korea’s ride-hailing and food delivery app markets, the business activities of rival companies and the choices available to consumers and merchants.
Among the benefits Uber sees in the deal are greater overlap between users of its mobility and delivery services and more advertising and promotional opportunities for merchants.
The deal could also affect competition if Uber bundles its ride-hailing and delivery services into a single membership program or combines data from the two platforms.
Motorbikes are seen at a delivery center for food delivery platform Baemin, also known as Baedal Minjok, in Seoul on Dec. 29, 2020.YONHAP
In July, Uber announced plans to offer Delivery Hero shareholders 41.50 euros ($47.50) in cash per share. The company aims to complete the acquisition by the second half of next year after securing approval from competition authorities in relevant jurisdictions.
Uber had initially considered forming a consortium with Naver to acquire Baemin. However, it moved to pursue the acquisition on its own after Naver withdrew while citing changes in the business environment.
Uber entered Korea’s food delivery market with Uber Eats in 2017, only to exit in 2019 after struggling to compete with Baemin and other local players. Eight years later, the proposed acquisition would bring Uber back through Baemin, its former rival.
“We plan to assess the deal’s overall impact on competition in Korea’s ride-hailing and food delivery app markets, including its effects on competitors and the choices available to consumers and merchants,” an FTC official said.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
